CHARTER TOWNSHIP OF COMMERCE

Assistance Listing, Federal Agency, and Program Name - 21.027 U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - Not Applicable Pass-through Entity - Not Applicable - Direct funded Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.302, Financial Management, states the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes and regulations and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes and regulations and the terms and conditions of the Federal award. Condition - The Township's March 31, 2024 report overstated expenses incurred for the reporting period by approximately $600,000. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - During testing, it was discovered that the project expenditure reported $4,128,095, representing the total amount of the award. However, as of the reporting date of March 31, 2024, the Township had not yet incurred expenditures totaling approximately $600,000. The March 31, 2024 report reflects the total activity through December 31, 2023. The U.S. Department of Treasury requires that the Township file a project and expenditure report annually for annual periods ended March 31 by April 30. Cause and Effect - The Township did not have an internal control structure that reconciled expenditures per the report to expenditures incurred as of the reporting date. The lack of internal control structure resulted in the March 31, 2024 report being overstated by approximately $600,000, i.e., the amount of expenditures not incurred as of the reporting date. Recommendation - We recommend that controls be implemented to ensure that amounts being recorded on grant reporting are traced to supporting costs incurred and documentation as of the reporting date to ensure reported amounts are accurate. Views of Responsible Officials and Corrective Action Plan- The Township will put in place a control where the treasurer, finance director, and department head responsible for the grant are reporting accurately costs incurred with reconciling supporting documentation and ensuring the reported amounts are correct.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds and 97.044, U.S. Department of Homeland Security, Assistance to Firefighters Grant Award Number - N/A for 21.027 and EMW-2020-FG-13819 for 97.044 Pass through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Grant requirements for Assistance to Firefighters Grant require that recipients submit semiannual financial (SF-425) reports and semiannual performance reports. The grant requirements for Coronavirus State and Local Fiscal Recovery Funds require recipients to file an annual project and expenditure report. Condition - Related to the Assistance to Firefighters Grant, the Township did not file one of the semiannual financial reports, nor did the Township file either semiannual performance report. The Township also did not file the annual project and expenditure report required by the Coronavirus State and Local Fiscal Recovery Funds program. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - The Township did not file three of the four required reports related to the Assistance to Firefighters Grant, nor did the Township file the one report required by the Coronavirus State and Local Fiscal Recovery Funds program. Cause and Effect - The Township did not have an internal control structure that identified and tracked grant reporting requirements. Recommendation - We recommend that controls be implemented to ensure that grant requirements are being reviewed for potential reporting requirements and that a tracking mechanism be put in place to ensure the required reports are completed and filed. Views of Responsible Officials and Corrective Action Plan - The treasurer, finance director, and the department head responsible for the grant will create an internal control process that includes a folder with all grant reporting requirement dates and information, receipts, and disbursements to ensure timely filing of reports is completed.