TOWN OF TOWNSENDLocal Government

2024-001 U.S. Department of Treasury & U.S. Environmental Protection Agency Passed through the Commonwealth of Massachusetts – Massachusetts Clean Water Trust COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Capitalization Grants for Drinking Water State Revolving Fund – ALN 66.468 Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria: The Uniform Guidance requires written policies regarding cash management, determination of allowable costs, employee travel, procurement and subrecipient monitoring. Condition: The Town has not documented in writing its policies regarding federal awards. Cause: Lack of documentation of policies and procedures. Effect: The Town is not in compliance with the Uniform Guidance requirements. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: The Town should implement procedures to properly document all federal awards policies required by the Uniform Guidance. Views of Responsible Official: Management agrees with the finding.

2024-002 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria: The compliance supplement identifies four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. Per 2 CFR 200.1, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: Obligations and expenditures were overstated by $93,955 on the March 31, 2024 Project and Expenditure report. Cause: The Town did not have a clear understanding of the reporting requirements and included amounts approved but not obligated as obligated and expended. Effect: The Town is not in compliance with grant reporting requirements. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: The Town should implement procedures to only report obligations and expenditures on the Project and Expenditure reporting for items that meet the federal criteria for reporting as an obligation and expenditure. Views of Responsible Official: Management agrees with the finding.

2021-001 Document Policies and Procedures Over Federal Programs Federal Program(s) Information Federal Agency: U.S Department of the Treasury Award Name: COVID-19 ? Coronavirus Relief Fund AL Number(s): 21.019 Award Year: 2021 Compliance Requirement: A/B, H 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 requirements related to Federal awards. The 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 has not formalized written policies and procedures related to Federal awards as required under Uniform Guidance. Cause Weaknesses in the formal documentation 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. Recommendation We recommend the Town ensure that written policies and procedures are compiled and adopted as soon as practicable to ensure compliance 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 summary schedule of prior year audit findings and status.