TOWN OF ALEXANDER, NEW YORKLocal Government

Federal Agency - United States Department of Treasury Federal Programs - COVID-19 Coronavirus State and Local Fiscal Recovery Funds (21.027) Federal Award Years - 2021 State Agency - Not applicable Reference - 2024-003 Procurement - Noncompliance Criteria - Management is responsible for procuring engineering services. CFR §1780.39 (b) states applicants should negotiate for procurement of professional services, whereby competitor’s qualifications are evaluated and the most qualified competitor is selected, subject to negotiations of fair and reasonable compensation. CFR §1780.39(b)(l)(i) states applicants shall publicly announce all requirements for engineering and architectural services. Condition - The engineering services for the construction of water district #6 was not procured in accordance with CFR §1780.39. Cause - The Town contracted with an engineering firm they used in the past. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Effect of Condition - The Town may not have received the fairest and most reasonable pricing for engineering services or selected the most qualified firm. Repeat Finding - This is a repeat finding of item 2023-003 as reported for the year ended December 31, 2023. Recommendation - We recommend that the Town procure these services in the future. Questioned Costs - None. Perspective - This was the only program tested for procurement. As such, there may be more procurement issues. View’s of Responsible Officials and Planned Corrective Actions - Management will procure engineering services in the future.

Federal Agency - United States Department of Agriculture Federal Programs - Water and Waste Disposal Systems for Rural Communities - (10.760) Federal Award Years - 2019 State Agency - Not applicable Reference - 2023-002 Capital Asset Records - Material Weakness and Noncompliance Criteria - Management is responsible for maintaining capital asset records that are accurate. Code of Federal Regulations (CFR) §200.313(d) Equipment states, at a minimum, the following must be met: 1. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. 2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. 3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. 4. Adequate maintenance procedures must be developed to keep the property in good condition. 5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition - The capital asset records are insufficient as they do not include the source of funding, acquisition date, or the cost of the property as well as certain other information required by Federal regulations. Additionally, no physical inventory has occurred nor is there a control system that has been implemented over these assets. Cause - The Town has not maintained capital asset records or engaged a third party export. Effect of Condition - The Town is not in compliance with CFR §200.313(d). Additionally, capital assets have been excluded from these financial statements. Repeat Finding - This is a repeat finding of item 2022-002 as reported for the year ended December 31, 2022. Recommendation - We recommend the Town invest in capital asset software to maintain the capital assets and have a physical inventory performed. Questioned Costs - None. Perspective - No other material omissions were noted in the financial statements. This is an isolated issue. View’s of Responsible Officials and Planned Corrective Actions - Management will look at investing in a capital asset software and having a physical inventory performed.

Federal Agency - United States Department of Agriculture Federal Programs - Water and Waste Disposal Systems for Rural Communities - (10.760) Federal Award Years - 2019 State Agency - Not applicable Reference - 2023-003 Procurement - Noncompliance Criteria - Management is responsible for procuring engineering services. CFR §1780.39 (b) states applicants should negotiate for procurement of professional services, whereby competitor’s qualifications are evaluated and the most qualified competitor is selected, subject to negotiations of fair and reasonable compensation. CFR §1780.39(b)(l)(i) states applicants shall publicly announce all requirements for engineering and architectural services. Condition - The engineering services for the construction of water district #6 was not procured in accordance with CFR §1780.39. Cause - The Town contracted with an engineering firm they used in the past. Effect of Condition - The Town may not have received the fairest and most reasonable pricing for engineering services or selected the most qualified firm. Repeat Finding - This is a repeat finding of item 2022-003 as reported for the year ended December 31, 2022. Recommendation - We recommend that the Town procure these services in the future. Questioned Costs - None. Perspective - This was the only program tested for procurement. As such, there may be more procurement issues. View’s of Responsible Officials and Planned Corrective Actions - Management will procure engineering services in the future.

Criteria - Management is responsible for maintaining capital asset records that are accurate. Code of Federal Regulations (CFR) ?200.313(d) Equipment states, at a minimum, the following must be met: 1. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. 2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. 3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. 4. Adequate maintenance procedures must be developed to keep the property in good condition. 5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition - The capital asset records are insufficient as they do not include the source of funding, acquisition date, or the cost of the property as well as certain other information required by Federal regulations. Additionally, no physical inventory has occurred nor is there a control system that has been implemented over these assets. Effect of Condition - The Town is not in compliance with CFR ?200.313(d). Additionally, capital assets have been excluded from these financial statements. Recommendation - We recommend the Town invest in capital asset software to maintain the capital assets and have a physical inventory performed. Management?s Response - (2) Audit Finding 2022-002 - The Town did not have accurate capital asset records. (a) Implementation Plan of Actions - The Town is looking into capital asset software and is having a physical inventory performed. (b) Implementation Date - This will be implemented for the year ended December 31, 2023. (c) Persons Responsible for Implementation - The Town Board and Supervisor of the Town of Alexander.

Criteria - Management is responsible for procuring engineering services. CFR ?1780.39 (b) states applicants should negotiate for procurement of professional services, whereby competitor?s qualifications are evaluated and the most qualified competitor is selected, subject to negotiations of fair and reasonable compensation. CFR ?1780.39(b)(l)(i) states applicants shall publicly announce all requirements for engineering and architectural services. Condition - The engineering services for the construction of water district #6 was not procured in accordance with CFR ?1780.39. Effect of Condition - The Town may not have received the fairest and most reasonable pricing for engineering services or selected the most qualified firm. Recommendation - We recommend that the Town procure these services in the future. Management?s Response - (3) Audit Finding 2022-003 - The engineering services for the construction of water district #6 was not procured. (a) Implementation Plan of Actions - The Town will procure engineering services in the future. (b) Implementation Date - This will be implemented for the year ended December 31, 2023. (c) Persons Responsible for Implementation - The Town Board and Supervisor of the Town of Alexander.