Town of MiddletownLocal Government

2021-001 Standards for Program Financial Management System Federal Programs: Coronavirus Relief Fund (Assistance Listing #21.019) Federal Agency: U.S. Department of Treasury Criteria: The financial management requirements under 2 CFR 200.302 require each non-federal entity to maintain a financial management system providing identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listing title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through, if any. Condition: The Town of Middletown does not have policies and procedures in place to accurately and completely account for federally funded activities separately from non-federally funded activities in their financial management system. Cause: The Town of Middletown lacks a system of proper internal controls that encompasses all aspects of the specific written documentation requirements under 2 CFR 200.302. The expenditures associated with the specified federal grant program and Assistance Listing No. are not separately identified within the Town of Middletown?s accounting system. Effect: The Town of Middletown is not in compliance with CFR 200.302 Financial Management, which requires federal program identification within its accounts. Recommendation: We recommend the Town of Middletown institute a chart of accounts that allow separate identification within the accounts for each federal grant award expended.