TOWN OF WATERFORD, CONNECTICUTLocal Government

Federal Agency: Department of the Treasury Federal Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: March 3, 2021 through December 31, 2026 Award Period: 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Town is required to submit annual Project and Expenditure Reports as of March 31st, per Coronavirus State and Local Fiscal Recovery Fund Reporting Compliance Requirements. The Town internal control processes over reporting require review and approval of project expenditure reports for accuracy prior to submission to the granting agency. Condition: Testing of the March 31, 2025 report revealed cumulative expenditures did not match underlying accounting records, indicating no effective controls to ensure accuracy. Questioned Costs: Total cumulative expenditures were underreported by $271,749. Context: The Town submitted Project and Expenditure Reports that did not tie to underlying accounting records. Cause: Expenditures were underreported due to incorrect report parameters used to generate supporting documentation used in the report preparation and inadequate review controls. Effect: Inaccurate reporting could result in misrepresentation of progress in program/project status and eligible expenditures to date. Without proper controls in place over reporting, inaccurate project information could be reported and not detected by the Town. Repeat Finding: No Recommendation: We recommend the Town strengthen processes and internal controls over grant expenditure reporting to ensure accurate data and proper review before submission. Views of Responsible Officials: Management agrees with this finding.

Finding No.2019-001 Procurement and Suspension and Debatement Program All Federal Programs Criteria The Board of Education of the Town of Waterford must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition The Board of Education?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326 Questioned Costs None noted. Context Although the Board of Education did not have a policy in place in conformity with the federal uniform guidance criteria, the Board of Education did follow the State procedures as it relates to the contracts under the procurements applicable to the Town of Waterford?s major program. Effect With the absence of a compliant policy for the Board of Education, the Town of Waterford is at risk for noncompliance as it relates to federal procurement. Cause The Board of Education was unaware of the details surrounding the new procurement standards. Recommendation We recommend that the Board of Education review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials and Planned Corrective Actions Management agrees with this finding.