Town of Abingdon, Virginia

2022-002: Coronavirus State and Local Fiscal Recovery Fund ? AL# 21.027, Procurement, Suspension and Debarment ? Uniform Guidance Procurement Documentation Condition: The Town does not have written procurement policies that fully align with requirements in the Uniform Guidance. Criteria: During fiscal year 2019, the sections of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) covering procurement became effective after a three-year grace period on the implementation date. The Uniform Guidance requires entities to have written policies and procedures in place covering many types of procurement situations, including conflicts of interest, avoidance of geographical preferences, bidding thresholds, value engineering, and others. Cause: The Town hasn?t typically been subject to the Uniform Guidance requirements during most recent fiscal years and was unaware of the necessary changes. Effect: Procurement procedures may not be conducted in accordance with Uniform Guidance requirements. Context: Several Uniform Guidance procurement requirements were not noted in the Town?s procurement policy. Questioned Costs: N/A Recommendation: The Town should prepare a revised policy for procurement procedures to more closely align with Uniform Guidance requirements. Repeat Finding: Yes, 2021-005. Management?s Response: Management concurs with this recommendation..

December 20, 2022 The Town of Abingdon respectfully submits the following corrective action plan for the year ended June 30, 2022. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 513 State Street Bristol, VA 24201 Audit period: June 30, 2022 The findings from the June 30, 2022 Schedule of Findings and Questioned Costs (the "Schedule") are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-002: Uniform Guidance Procurement Documentation Condition: The Town does not have written procurement policies that fully align with requirements in the Uniform Guidance. Criteria: During fiscal year 2019, the sections of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) covering procurement became effective after a three-year grace period on the implementation date. The Uniform Guidance requires entities to have written policies and procedures in place covering many types of procurement situations, including conflicts of interest, avoidance of geographical preferences, bidding thresholds, value engineering, and others. Cause: The Town hasn't typically been subject to the Uniform Guidance requirements during most recent fiscal years and was unaware of the necessary changes. Effect: Procurement procedures may not be conducted in accordance with Uniform Guidance requirements. Context: Several Uniform Guidance procurement requirement s were not noted in the Town' s procurement policy. Questioned Costs: N/A Recommendation: The Town should prepare a revised policy for procurement procedures to more closely align with Uniform Guidance requirements. Repeat Finding: N/A Corrective Action: Town management and legal counsel have compiled multiple sample procurement policies and checklists and is continuing its efforts in updating the Town's procurement policies to conform to Uniform Guidance requirements and are clearly understood and used in all federal supported purchases and expenditures in place. If the Federal Audit Clearing house has questions regarding this plan, please call Steve Trotman, Director of Finance at 276-492-2116. Stephen Trotman Director of Finance

2021-005

Condition: The Town does not have written procurement policies that fully align with requirements in the Uniform Guidance. Criteria: During fiscal year 2019, the sections of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) covering procurement became effective after a three-year grace period on the implementation date. The Uniform Guidance requires entities to have written policies and procedures in place covering many types of procurement situations, including conflicts of interest, avoidance of geographical preferences, bidding thresholds, value engineering, and others. Cause: The Town hasn?t typically been subject to the Uniform Guidance requirements during most recent fiscal years and was unaware of the necessary changes. Effect: Procurement procedures may not be conducted in accordance with Uniform Guidance requirements. Context: Several Uniform Guidance procurement requirements were not noted in the Town?s procurement policy. Questioned Costs: N/A Recommendation: The Town should prepare a revised policy for procurement procedures to more closely align with Uniform Guidance requirements. Repeat Finding: N/A Management?s Response: Management concurs with this recommendation.

January 13, 2022 The Town of Abingdon respectfully submits the following corrective action plan for the year ended June 30, 2021. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 513 State Street Bris tol , VA 24201 Audit period: June 30, 2021 The finding s from the June 30, 2021 Schedule of Findings and Questioned Costs (the " Schedule") are discussed below. The findings are numbered consistently with the number assigned in the Sc hedule. FINDINGS-FINANCIAL STATEMENT AUDIT 2021-001: Unrecorded Retainage Payable (Significant Deficiency) Condition: The Town had a significant construction project in progress at year-end, and the retainage payable associated with this project was not recorded as a payable and expenditure on the fund statements at year-end. Recommendation: The Town should take steps to ensure that all retainage payable due to contractors is recorded in the proper year in which it was earned in order to present an accurate amount of payables and expenditures for the year. Corrective Action: Management has immediately taken act ions to proactively review all construction contracts and invoices to determine and record retainage payables. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT 2021-005: Uniform Guidance Procurement Documentation Condition: The Town does not have written procurement policies that fully align with requirements in the Uniform Guidance. Criteria: During fiscal year 2019, the section s of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principle s, and Audit Requirements for Federal Awards (Uniform Guidance) covering procurement became effective after a three-year grace period on the implementation date. The Uniform Guidance requires entities to have written policies and procedures in place covering many types of procurement situations, including conflict s of interest, avoidance of geographical preferences, bidding thresholds, value engineering, and others. Cause: The Town hasn't typically been subject to the Uniform Guidance requirements during most recent fiscal years and was unaware of the necessary changes. Effect: Procurement procedures may not be conducted in accordance with Uniform Guidance requirements. Context: Several Uniform Guidance procurement requirements were not noted in the Town' s procurement policy. Questioned Costs: NIA Recommendation: The Town should prepare a revise d policy for procurement procedures to more closely align with Uniform Guidance requirements. Repeat Finding: NIA Corrective Action: Town management and legal counsel are currently updating the Town's procurement policies to conform to Uniform Guidance requirements and are clearly understood and used in all federal supported purchases and expenditures in place. If the Federal Audit Clearinghouse has questions regarding this plan, please call Steve Trotman, Director of Finance at 276-492-2116.