Town of Vinton, VirginiaLocal Government

Management acknowledges the findings and we are working to create, develop, and implement stronger procedures and internal controls surrounding the Grant Fund and federal awards.

2023-004

Management acknowledges the recommendation. Throughout the duration of this multi-year project, staff made repeated efforts to obtain certified payroll reports from the applicable contractors and subcontractors. Despite multiple requests and follow-up attempts, we were not successful in securing the required documentation. We will evaluate and strengthen our procedures going forward to improve contractor compliance and ensure that certified payroll reports are consistently obtained, reviewed, and retained in accordance with Davis-Bacon requirements.

2023-005

Management acknowledges the recommendation. Throughout the duration of this multi-year project, staff made repeated efforts to obtain quality assurance testing documentation from the applicable contractors and subcontractors. Despite multiple requests and follow-up attempts, we were not successful in securing the required documentation. We will evaluate and strengthen our procedures going forward to improve contractor compliance and ensure that quality assurance testing records are consistently obtained, reviewed, and retained in accordance with applicable requirements

Management acknowledges the findings. Expenditures in the noted departments exceeded budgeted appropriations due to operational needs and project-related costs that were higher than originally anticipated. Throughout the fiscal year, staff monitored spending and adjusted where possible; however, certain expenditures could not be deferred.We will strengthen our budget monitoring procedures and implement earlier and more frequent reviews to ensure that necessary budget amendments are processed in a timely manner. In addition, we will continue working with all departments and external partners to improve documentation timeliness and maintain expenditures within approved appropriations going forward.

January 16, 2025 The Town of Vinton respectfully submits the following corrective action plan for the year ending June 30, 2023. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 3906 Electric Road Roanoke, VA 24018 Audit period: June 30, 2023 The findings from the June 30, 2023, Schedule of Findings and Questioned Costs (the “Schedule”) are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS – FINANCIAL STATEMENT AUDIT 2023-001: Audit Adjustments (Material Weakness) Condition: During the audit, we noted that several year-end audit adjustments were required to ensure that the financials were prepared in accordance with accounting principles generally accepted in the United States of America. The adjustments were related to debt, accounts receivable, and capital assets. Criteria: Audit adjustments were required to correct balances in order for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: With regard to governmental activity long-term debt, it appears that the roll forward was not reviewed before year-end entries were made, resulting in additional adjustments to long-term debt balances. With regard to business-type activities' long-term debt, principal payments were recorded as an expense rather than a reduction to long-term debt, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities' accrued interest, amortization schedules were not reviewed before entries were made, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities capital assets, roll forwards, and depreciation schedules were not reviewed before entries were made, resulting in additional adjustments. With regard to governmental activities receivables and deferred revenue were not correctly captured and recorded at year end. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-001: Audit Adjustments (Material Weakness) (Continued) Effect: There is an increased risk of financial statement misstatement Recommendation: We recommend establishing procedures in which qualified supervisors are reviewing year-end work papers that feed into the final general ledger and focus on the accuracy of year-end balances. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. 2023-002: Segregation of Duties (Material Weakness) Condition: A fundamental concept of internal controls is the separation of duties. No one employee should have access to both physical assets and the related accounting records, or to all phases of a transaction. A proper segregation of duties has not been established in functions related to accounts payable, accounts receivable, cash disbursements, and information technology. Criteria: • Mail should be opened by an employee not responsible for accounting, such as the Town Clerk. Cash receipts could be recorded and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advice, could be forwarded to the accounting staff for postings to the general ledger and detailed customer accounts. • Customer complaints, returned checks, disputed items, and other such matters should be investigated by someone who is independent of preparing daily cash receipts and deposits. • Checks and remittance advice should be placed into envelopes and mailed by someone with no other accounting responsibilities. • Water and sewer billing should be independent of the accounts receivable function. Cause: The size of the Town’s accounting staff prohibits complete adherence to segregation of duties. Effect: Internal controls are designed to safeguard assets and detect losses from employee dishonesty or error. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-002: Segregation of Duties (Material Weakness) (Continued) Recommendation: Steps should be taken to eliminate the performance of conflicting duties where possible or to implement effective compensating controls. Planned Corrective Action: Management noted this finding. The Finance Director has segregated duties, to the extent practical, to minimize instances where the same person has complete control of a transaction or conflicting duties. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2023-003: Coronavirus State and Local Fiscal Recovery Fund – AL# 21.027, Highway Planning and Construction – AL# 20.205, Late Filling of Data Collection Form Condition: The Town did not file the data collection form for the year ended June 30, 2023, timely. Criteria: For June 30, 2023, year-end audits, under the requirements in the Uniform Guidance and the Office of Management and Budget (OMB), all entities are required to submit the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity’s annual audit or nine months after the entity’s fiscal year end. Cause: Management did not complete and certify their portion of the form before the deadline. Form cannot be completed before audit is issued. Effect: The entity’s form was submitted to the Federal Audit Clearinghouse late, delaying the completion of all annual audit requirements for the Town. Recommendation: Management should take steps to ensure that the form is filed timely Planned Corrective Action: Management takes note of this finding. The Finance Director is working with the department to ensure that reports and the audit are completed in a timely manner.   FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) 2023-004: Schedule of Expenditures and Federal Awards (Significant Deficiency) Condition: The Schedule of Expenditures and Federal Awards (SEFA) was prepared without supervisor review resulting in several auditor corrections. Criteria: Segregation of duties and review procedures should be applied to federal award workpapers. Cause: Town has not established written internal control policies with regard to federal awards. Effect: Risk that the Town’s information in the SEFA is not accurate, complete, or appropriately presented in accordance with Uniform Guidance. Recommendation: Management should develop and implement written internal control policies. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. If the Federal Audit Clearinghouse has questions regarding this plan, please call Andrew Keen, Finance Director (540) 983-0608 ext. 7012. Sincerely yours, Name: Andrew Keen Title: Finance Director

January 16, 2025 The Town of Vinton respectfully submits the following corrective action plan for the year ending June 30, 2023. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 3906 Electric Road Roanoke, VA 24018 Audit period: June 30, 2023 The findings from the June 30, 2023, Schedule of Findings and Questioned Costs (the “Schedule”) are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS – FINANCIAL STATEMENT AUDIT 2023-001: Audit Adjustments (Material Weakness) Condition: During the audit, we noted that several year-end audit adjustments were required to ensure that the financials were prepared in accordance with accounting principles generally accepted in the United States of America. The adjustments were related to debt, accounts receivable, and capital assets. Criteria: Audit adjustments were required to correct balances in order for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: With regard to governmental activity long-term debt, it appears that the roll forward was not reviewed before year-end entries were made, resulting in additional adjustments to long-term debt balances. With regard to business-type activities' long-term debt, principal payments were recorded as an expense rather than a reduction to long-term debt, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities' accrued interest, amortization schedules were not reviewed before entries were made, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities capital assets, roll forwards, and depreciation schedules were not reviewed before entries were made, resulting in additional adjustments. With regard to governmental activities receivables and deferred revenue were not correctly captured and recorded at year end. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-001: Audit Adjustments (Material Weakness) (Continued) Effect: There is an increased risk of financial statement misstatement Recommendation: We recommend establishing procedures in which qualified supervisors are reviewing year-end work papers that feed into the final general ledger and focus on the accuracy of year-end balances. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. 2023-002: Segregation of Duties (Material Weakness) Condition: A fundamental concept of internal controls is the separation of duties. No one employee should have access to both physical assets and the related accounting records, or to all phases of a transaction. A proper segregation of duties has not been established in functions related to accounts payable, accounts receivable, cash disbursements, and information technology. Criteria: • Mail should be opened by an employee not responsible for accounting, such as the Town Clerk. Cash receipts could be recorded and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advice, could be forwarded to the accounting staff for postings to the general ledger and detailed customer accounts. • Customer complaints, returned checks, disputed items, and other such matters should be investigated by someone who is independent of preparing daily cash receipts and deposits. • Checks and remittance advice should be placed into envelopes and mailed by someone with no other accounting responsibilities. • Water and sewer billing should be independent of the accounts receivable function. Cause: The size of the Town’s accounting staff prohibits complete adherence to segregation of duties. Effect: Internal controls are designed to safeguard assets and detect losses from employee dishonesty or error. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-002: Segregation of Duties (Material Weakness) (Continued) Recommendation: Steps should be taken to eliminate the performance of conflicting duties where possible or to implement effective compensating controls. Planned Corrective Action: Management noted this finding. The Finance Director has segregated duties, to the extent practical, to minimize instances where the same person has complete control of a transaction or conflicting duties. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2023-003: Coronavirus State and Local Fiscal Recovery Fund – AL# 21.027, Highway Planning and Construction – AL# 20.205, Late Filling of Data Collection Form Condition: The Town did not file the data collection form for the year ended June 30, 2023, timely. Criteria: For June 30, 2023, year-end audits, under the requirements in the Uniform Guidance and the Office of Management and Budget (OMB), all entities are required to submit the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity’s annual audit or nine months after the entity’s fiscal year end. Cause: Management did not complete and certify their portion of the form before the deadline. Form cannot be completed before audit is issued. Effect: The entity’s form was submitted to the Federal Audit Clearinghouse late, delaying the completion of all annual audit requirements for the Town. Recommendation: Management should take steps to ensure that the form is filed timely Planned Corrective Action: Management takes note of this finding. The Finance Director is working with the department to ensure that reports and the audit are completed in a timely manner.   FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) 2023-004: Schedule of Expenditures and Federal Awards (Significant Deficiency) Condition: The Schedule of Expenditures and Federal Awards (SEFA) was prepared without supervisor review resulting in several auditor corrections. Criteria: Segregation of duties and review procedures should be applied to federal award workpapers. Cause: Town has not established written internal control policies with regard to federal awards. Effect: Risk that the Town’s information in the SEFA is not accurate, complete, or appropriately presented in accordance with Uniform Guidance. Recommendation: Management should develop and implement written internal control policies. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. If the Federal Audit Clearinghouse has questions regarding this plan, please call Andrew Keen, Finance Director (540) 983-0608 ext. 7012. Sincerely yours, Name: Andrew Keen Title: Finance Director

2022-004

Management acknowledges the auditors’ findings and will develop and implement a formal internal control over the preparation and review of the Schedule of Expenditures of Federal Awards to ensure accuracy and compliance with Uniform Guidance. SEFA preparation will be assigned to designated staff, with a separate supervisory review to verify completeness, proper classification, and reconciliation to the general ledger. Written procedures, checklists, and documented reviews will be established, along with staff training on federal award requirements. These actions will reduce the risk of errors and strengthen the reliability of the Town’s federal award reporting

2022-003

Management acknowledges the auditors’ findings and will develop and implement a formal internal control over the preparation and review of the Schedule of Expenditures of Federal Awards to ensure accuracy and compliance with Uniform Guidance. SEFA preparation will be assigned to designated staff, with a separate supervisory review to verify completeness, proper classification, and reconciliation to the general ledger. Written procedures, checklists, and documented reviews will be established, along with staff training on federal award requirements. These actions will reduce the risk of errors and strengthen the reliability of the Town’s federal award reporting

2022-004

January 16, 2025 The Town of Vinton respectfully submits the following corrective action plan for the year ending June 30, 2023. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 3906 Electric Road Roanoke, VA 24018 Audit period: June 30, 2023 The findings from the June 30, 2023, Schedule of Findings and Questioned Costs (the “Schedule”) are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS – FINANCIAL STATEMENT AUDIT 2023-001: Audit Adjustments (Material Weakness) Condition: During the audit, we noted that several year-end audit adjustments were required to ensure that the financials were prepared in accordance with accounting principles generally accepted in the United States of America. The adjustments were related to debt, accounts receivable, and capital assets. Criteria: Audit adjustments were required to correct balances in order for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: With regard to governmental activity long-term debt, it appears that the roll forward was not reviewed before year-end entries were made, resulting in additional adjustments to long-term debt balances. With regard to business-type activities' long-term debt, principal payments were recorded as an expense rather than a reduction to long-term debt, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities' accrued interest, amortization schedules were not reviewed before entries were made, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities capital assets, roll forwards, and depreciation schedules were not reviewed before entries were made, resulting in additional adjustments. With regard to governmental activities receivables and deferred revenue were not correctly captured and recorded at year end. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-001: Audit Adjustments (Material Weakness) (Continued) Effect: There is an increased risk of financial statement misstatement Recommendation: We recommend establishing procedures in which qualified supervisors are reviewing year-end work papers that feed into the final general ledger and focus on the accuracy of year-end balances. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. 2023-002: Segregation of Duties (Material Weakness) Condition: A fundamental concept of internal controls is the separation of duties. No one employee should have access to both physical assets and the related accounting records, or to all phases of a transaction. A proper segregation of duties has not been established in functions related to accounts payable, accounts receivable, cash disbursements, and information technology. Criteria: • Mail should be opened by an employee not responsible for accounting, such as the Town Clerk. Cash receipts could be recorded and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advice, could be forwarded to the accounting staff for postings to the general ledger and detailed customer accounts. • Customer complaints, returned checks, disputed items, and other such matters should be investigated by someone who is independent of preparing daily cash receipts and deposits. • Checks and remittance advice should be placed into envelopes and mailed by someone with no other accounting responsibilities. • Water and sewer billing should be independent of the accounts receivable function. Cause: The size of the Town’s accounting staff prohibits complete adherence to segregation of duties. Effect: Internal controls are designed to safeguard assets and detect losses from employee dishonesty or error. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-002: Segregation of Duties (Material Weakness) (Continued) Recommendation: Steps should be taken to eliminate the performance of conflicting duties where possible or to implement effective compensating controls. Planned Corrective Action: Management noted this finding. The Finance Director has segregated duties, to the extent practical, to minimize instances where the same person has complete control of a transaction or conflicting duties. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2023-003: Coronavirus State and Local Fiscal Recovery Fund – AL# 21.027, Highway Planning and Construction – AL# 20.205, Late Filling of Data Collection Form Condition: The Town did not file the data collection form for the year ended June 30, 2023, timely. Criteria: For June 30, 2023, year-end audits, under the requirements in the Uniform Guidance and the Office of Management and Budget (OMB), all entities are required to submit the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity’s annual audit or nine months after the entity’s fiscal year end. Cause: Management did not complete and certify their portion of the form before the deadline. Form cannot be completed before audit is issued. Effect: The entity’s form was submitted to the Federal Audit Clearinghouse late, delaying the completion of all annual audit requirements for the Town. Recommendation: Management should take steps to ensure that the form is filed timely Planned Corrective Action: Management takes note of this finding. The Finance Director is working with the department to ensure that reports and the audit are completed in a timely manner.   FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) 2023-004: Schedule of Expenditures and Federal Awards (Significant Deficiency) Condition: The Schedule of Expenditures and Federal Awards (SEFA) was prepared without supervisor review resulting in several auditor corrections. Criteria: Segregation of duties and review procedures should be applied to federal award workpapers. Cause: Town has not established written internal control policies with regard to federal awards. Effect: Risk that the Town’s information in the SEFA is not accurate, complete, or appropriately presented in accordance with Uniform Guidance. Recommendation: Management should develop and implement written internal control policies. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. If the Federal Audit Clearinghouse has questions regarding this plan, please call Andrew Keen, Finance Director (540) 983-0608 ext. 7012. Sincerely yours, Name: Andrew Keen Title: Finance Director

January 16, 2025 The Town of Vinton respectfully submits the following corrective action plan for the year ending June 30, 2023. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 3906 Electric Road Roanoke, VA 24018 Audit period: June 30, 2023 The findings from the June 30, 2023, Schedule of Findings and Questioned Costs (the “Schedule”) are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS – FINANCIAL STATEMENT AUDIT 2023-001: Audit Adjustments (Material Weakness) Condition: During the audit, we noted that several year-end audit adjustments were required to ensure that the financials were prepared in accordance with accounting principles generally accepted in the United States of America. The adjustments were related to debt, accounts receivable, and capital assets. Criteria: Audit adjustments were required to correct balances in order for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: With regard to governmental activity long-term debt, it appears that the roll forward was not reviewed before year-end entries were made, resulting in additional adjustments to long-term debt balances. With regard to business-type activities' long-term debt, principal payments were recorded as an expense rather than a reduction to long-term debt, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities' accrued interest, amortization schedules were not reviewed before entries were made, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities capital assets, roll forwards, and depreciation schedules were not reviewed before entries were made, resulting in additional adjustments. With regard to governmental activities receivables and deferred revenue were not correctly captured and recorded at year end. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-001: Audit Adjustments (Material Weakness) (Continued) Effect: There is an increased risk of financial statement misstatement Recommendation: We recommend establishing procedures in which qualified supervisors are reviewing year-end work papers that feed into the final general ledger and focus on the accuracy of year-end balances. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. 2023-002: Segregation of Duties (Material Weakness) Condition: A fundamental concept of internal controls is the separation of duties. No one employee should have access to both physical assets and the related accounting records, or to all phases of a transaction. A proper segregation of duties has not been established in functions related to accounts payable, accounts receivable, cash disbursements, and information technology. Criteria: • Mail should be opened by an employee not responsible for accounting, such as the Town Clerk. Cash receipts could be recorded and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advice, could be forwarded to the accounting staff for postings to the general ledger and detailed customer accounts. • Customer complaints, returned checks, disputed items, and other such matters should be investigated by someone who is independent of preparing daily cash receipts and deposits. • Checks and remittance advice should be placed into envelopes and mailed by someone with no other accounting responsibilities. • Water and sewer billing should be independent of the accounts receivable function. Cause: The size of the Town’s accounting staff prohibits complete adherence to segregation of duties. Effect: Internal controls are designed to safeguard assets and detect losses from employee dishonesty or error. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2023-002: Segregation of Duties (Material Weakness) (Continued) Recommendation: Steps should be taken to eliminate the performance of conflicting duties where possible or to implement effective compensating controls. Planned Corrective Action: Management noted this finding. The Finance Director has segregated duties, to the extent practical, to minimize instances where the same person has complete control of a transaction or conflicting duties. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2023-003: Coronavirus State and Local Fiscal Recovery Fund – AL# 21.027, Highway Planning and Construction – AL# 20.205, Late Filling of Data Collection Form Condition: The Town did not file the data collection form for the year ended June 30, 2023, timely. Criteria: For June 30, 2023, year-end audits, under the requirements in the Uniform Guidance and the Office of Management and Budget (OMB), all entities are required to submit the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity’s annual audit or nine months after the entity’s fiscal year end. Cause: Management did not complete and certify their portion of the form before the deadline. Form cannot be completed before audit is issued. Effect: The entity’s form was submitted to the Federal Audit Clearinghouse late, delaying the completion of all annual audit requirements for the Town. Recommendation: Management should take steps to ensure that the form is filed timely Planned Corrective Action: Management takes note of this finding. The Finance Director is working with the department to ensure that reports and the audit are completed in a timely manner.   FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) 2023-004: Schedule of Expenditures and Federal Awards (Significant Deficiency) Condition: The Schedule of Expenditures and Federal Awards (SEFA) was prepared without supervisor review resulting in several auditor corrections. Criteria: Segregation of duties and review procedures should be applied to federal award workpapers. Cause: Town has not established written internal control policies with regard to federal awards. Effect: Risk that the Town’s information in the SEFA is not accurate, complete, or appropriately presented in accordance with Uniform Guidance. Recommendation: Management should develop and implement written internal control policies. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties as it pertains to audit preparation. The department continues to work on separating duties between the Assistant Finance Director and (Senior) Financial Administrators, who will complete the working papers. The Finance Director/Treasurer will then review them for correctness. In addition, the team will work to link the documents to reduce the adjustments of the final documents. If the Federal Audit Clearinghouse has questions regarding this plan, please call Andrew Keen, Finance Director (540) 983-0608 ext. 7012. Sincerely yours, Name: Andrew Keen Title: Finance Director

2022-004

Management acknowledges the auditors’ findings and will develop and implement a formal internal control over the preparation and review of the Schedule of Expenditures of Federal Awards to ensure accuracy and compliance with Uniform Guidance. SEFA preparation will be assigned to designated staff, with a separate supervisory review to verify completeness, proper classification, and reconciliation to the general ledger. Written procedures, checklists, and documented reviews will be established, along with staff training on federal award requirements. These actions will reduce the risk of errors and strengthen the reliability of the Town’s federal award reporting

2022-003

Management acknowledges the auditors’ findings and will develop and implement a formal internal control over the preparation and review of the Schedule of Expenditures of Federal Awards to ensure accuracy and compliance with Uniform Guidance. SEFA preparation will be assigned to designated staff, with a separate supervisory review to verify completeness, proper classification, and reconciliation to the general ledger. Written procedures, checklists, and documented reviews will be established, along with staff training on federal award requirements. These actions will reduce the risk of errors and strengthen the reliability of the Town’s federal award reporting

2022-004

October 30, 2023 The Town of Vinton respectfully submits the following corrective action plan for the year ending June 30, 2022. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 3906 Electric Road Roanoke, VA 24018 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 – FINANCIAL STATEMENT AUDIT 2022-001: Audit Adjustments (Material Weakness) Condition: During the audit, we noted that several year-end audit adjustments were required to ensure that the financials were prepared in accordance with accounting principles generally accepted in the United States of America. The adjustments were related to debt, accounts receivable, and capital assets. Criteria: Audit adjustments were required to correct balances in order for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: With regard to governmental activity long-term debt, it appears that the roll forward was not reviewed before year-end entries were made, resulting in additional adjustments to long-term debt balances. With regard to business-type activities' long-term debt, principal payments were recorded as an expense rather than a reduction to long-term debt, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities' accrued interest, amortization schedules were not reviewed before entries were made, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities capital assets, roll forwards, and depreciation schedules were not reviewed before entries were made, resulting in additional adjustments. With regard to governmental activities receivables and deferred revenue were not correctly captured and recorded at year end. Effect: There is an increased risk of financial statement misstatement. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2022-001: Audit Adjustments (Material Weakness) (Continued) Recommendation: We recommend establishing procedures in which qualified supervisors are reviewing year-end work papers that feed into the final general ledger and focus on the accuracy of year-end balances. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties, as it pertains to audit preparation. Completion of working papers will be completed by Financial and Senior Financial Administrators, then reviewed for correctness by the Finance Director and Treasurer. In addition, the team will work to link the documents to reduce the adjustments of the final documents. 2022-002: Segregation of Duties (Material Weakness) Condition: A fundamental concept of internal controls is the separation of duties. No one employee should have access to both physical assets and the related accounting records, or to all phases of a transaction. A proper segregation of duties has not been established in functions related to accounts payable, accounts receivable, cash disbursements, and information technology. Criteria: • Mail should be opened by an employee not responsible for accounting, such as the Town Clerk. Cash receipts could be recorded and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advice, could be forwarded to the accounting staff for postings to the general ledger and detailed customer accounts. • Customer complaints, returned checks, disputed items, and other such matters should be investigated by someone who is independent of preparing daily cash receipts and deposits. • Checks and remittance advice should be placed into envelopes and mailed by someone with no other accounting responsibilities. • Water and sewer billing should be independent of the accounts receivable function. Cause: The size of the Town’s accounting staff prohibits complete adherence to segregation of duties. Effect: Internal controls are designed to safeguard assets and detect losses from employee dishonesty or error. Recommendation: Steps should be taken to eliminate the performance of conflicting duties where possible or to implement effective compensating controls. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2022-002: Segregation of Duties (Material Weakness) (Continued) Planned Corrective Action: Management noted this finding. The Finance Director has segregated duties, to the extent practical, to minimize instances where the same person has complete control of a transaction or conflicting duties. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-003: Coronavirus State and Local Fiscal Recovery Fund – AL# 21.027, Late Filling of Data Collection Form Condition: The Town did not file the data collection form for the year ended June 30, 2022, timely. Criteria: For June 30, 2022 year-end audits, under the requirements in the Uniform Guidance and the Office of Management and Budget (OMB), all entities are required to submit the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity’s annual audit or twelve months after the entity’s fiscal year end (June 30th for the Town of Vinton plus a three-month extension). Cause: Management did not complete and certify their portion of the form before the deadline. Form cannot be completed before audit is issued. Effect: The entity’s form was submitted to the Federal Audit Clearinghouse late, delaying the completion of all annual audit requirements for the Town. Recommendation: Management should take steps to ensure that the form is filed timely Planned Corrective Action: Management takes note of this finding. The Finance Director is working with the department to ensure reports are completed and the audit is completed in a timely manner.   FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) 2022-004: Schedule of Expenditures and Federal Awards (Significant Deficiency) Condition: The Schedule of Expenditures and Federal Awards (SEFA) was prepared without supervisor review resulting in several auditor corrections. Criteria: Segregation of duties and review procedures should be applied to federal award workpapers. Cause: Town has not established written internal control policies with regard to federal awards. Effect: Risk that the Town’s information in the SEFA is not accurate, complete, or appropriately presented in accordance with Uniform Guidance. Recommendation: Management should develop and implement written internal control policies. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties, as it pertains to audit preparation. Completion of working papers will be completed by Financial and Senior Financial Administrators, then reviewed for correctness by the Finance Director and Treasurer. If the Federal Audit Clearinghouse has questions regarding this plan, please call Andrew Keen, Finance Director (540) 983-0608 ext. 7012. Sincerely yours, Name: Andrew Keen Title: Finance Director

October 30, 2023 The Town of Vinton respectfully submits the following corrective action plan for the year ending June 30, 2022. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 3906 Electric Road Roanoke, VA 24018 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 – FINANCIAL STATEMENT AUDIT 2022-001: Audit Adjustments (Material Weakness) Condition: During the audit, we noted that several year-end audit adjustments were required to ensure that the financials were prepared in accordance with accounting principles generally accepted in the United States of America. The adjustments were related to debt, accounts receivable, and capital assets. Criteria: Audit adjustments were required to correct balances in order for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Cause: With regard to governmental activity long-term debt, it appears that the roll forward was not reviewed before year-end entries were made, resulting in additional adjustments to long-term debt balances. With regard to business-type activities' long-term debt, principal payments were recorded as an expense rather than a reduction to long-term debt, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities' accrued interest, amortization schedules were not reviewed before entries were made, resulting in additional adjustments to these accounts. With regard to governmental activities and business-type activities capital assets, roll forwards, and depreciation schedules were not reviewed before entries were made, resulting in additional adjustments. With regard to governmental activities receivables and deferred revenue were not correctly captured and recorded at year end. Effect: There is an increased risk of financial statement misstatement. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2022-001: Audit Adjustments (Material Weakness) (Continued) Recommendation: We recommend establishing procedures in which qualified supervisors are reviewing year-end work papers that feed into the final general ledger and focus on the accuracy of year-end balances. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties, as it pertains to audit preparation. Completion of working papers will be completed by Financial and Senior Financial Administrators, then reviewed for correctness by the Finance Director and Treasurer. In addition, the team will work to link the documents to reduce the adjustments of the final documents. 2022-002: Segregation of Duties (Material Weakness) Condition: A fundamental concept of internal controls is the separation of duties. No one employee should have access to both physical assets and the related accounting records, or to all phases of a transaction. A proper segregation of duties has not been established in functions related to accounts payable, accounts receivable, cash disbursements, and information technology. Criteria: • Mail should be opened by an employee not responsible for accounting, such as the Town Clerk. Cash receipts could be recorded and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advice, could be forwarded to the accounting staff for postings to the general ledger and detailed customer accounts. • Customer complaints, returned checks, disputed items, and other such matters should be investigated by someone who is independent of preparing daily cash receipts and deposits. • Checks and remittance advice should be placed into envelopes and mailed by someone with no other accounting responsibilities. • Water and sewer billing should be independent of the accounts receivable function. Cause: The size of the Town’s accounting staff prohibits complete adherence to segregation of duties. Effect: Internal controls are designed to safeguard assets and detect losses from employee dishonesty or error. Recommendation: Steps should be taken to eliminate the performance of conflicting duties where possible or to implement effective compensating controls. FINDINGS – FINANCIAL STATEMENT AUDIT (CONTINUED) 2022-002: Segregation of Duties (Material Weakness) (Continued) Planned Corrective Action: Management noted this finding. The Finance Director has segregated duties, to the extent practical, to minimize instances where the same person has complete control of a transaction or conflicting duties. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-003: Coronavirus State and Local Fiscal Recovery Fund – AL# 21.027, Late Filling of Data Collection Form Condition: The Town did not file the data collection form for the year ended June 30, 2022, timely. Criteria: For June 30, 2022 year-end audits, under the requirements in the Uniform Guidance and the Office of Management and Budget (OMB), all entities are required to submit the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity’s annual audit or twelve months after the entity’s fiscal year end (June 30th for the Town of Vinton plus a three-month extension). Cause: Management did not complete and certify their portion of the form before the deadline. Form cannot be completed before audit is issued. Effect: The entity’s form was submitted to the Federal Audit Clearinghouse late, delaying the completion of all annual audit requirements for the Town. Recommendation: Management should take steps to ensure that the form is filed timely Planned Corrective Action: Management takes note of this finding. The Finance Director is working with the department to ensure reports are completed and the audit is completed in a timely manner.   FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) 2022-004: Schedule of Expenditures and Federal Awards (Significant Deficiency) Condition: The Schedule of Expenditures and Federal Awards (SEFA) was prepared without supervisor review resulting in several auditor corrections. Criteria: Segregation of duties and review procedures should be applied to federal award workpapers. Cause: Town has not established written internal control policies with regard to federal awards. Effect: Risk that the Town’s information in the SEFA is not accurate, complete, or appropriately presented in accordance with Uniform Guidance. Recommendation: Management should develop and implement written internal control policies. Planned Corrective Action: Management has noted the opportunities for improvement in the review process and segregated duties, as it pertains to audit preparation. Completion of working papers will be completed by Financial and Senior Financial Administrators, then reviewed for correctness by the Finance Director and Treasurer. If the Federal Audit Clearinghouse has questions regarding this plan, please call Andrew Keen, Finance Director (540) 983-0608 ext. 7012. Sincerely yours, Name: Andrew Keen Title: Finance Director

CORRECTIVE ACTION PLAN January 6, 2022 The Federal Audit Clearinghouse: The Town of Vinton respectfully submits the following corrective action plan for the fiscal year of June 30, 2021. Name of Independent Public Accounting Firm Brown, Edwards and Company, L.L.P. 319 McClanahan Street SW Roanoke, VA 24014 Audit Period: June 30, 2021 The finding from June 30, 2021 schedule of findings and questioned costs are discussed below. FINDINGS AND QUESTIONED COSTS ? MAJOR FEDERAL AWARD PROGRAM AUDIT 2021-002: Coronavirus Relief Fund ? CFDA #21.019, Procurement Policies and Procedures Condition: The Town does not have complete and written procurement policies that are in compliance with the standards required by the Uniform Guidance 2 CFR Part 200. Criteria: Under the requirements in the Uniform Guidance, all entities are required to have written procurement policies that conform to applicable Federal laws and regulations and standards. The complete procurement standards are located at 2 CFR Part 200, Sections 317 through 326. Cause: While the Town does have procurement policies in place, the Town has not updated procurement policies in accordance with the Uniform Guidance. Effect: The lack of complete, written updated policies could result in an improper procurement using Federal funds. Recommendation: Management should draft and implement updated written procurement procedures to align with the Uniform Guidance requirements for all purchases to be made with Federal funds. Views of Responsible Officials and Planned Corrective Action: Upon notification of a recommendation from our auditors, staff immediately drafted a Federal Grant Policy which was adopted by Town Council at the meeting on September 21, 2021. Action Taken: The Town Council adopted and approved a new Grant Policy on September 21, 2021 that included criteria required under the Uniform Guidance. This policy became effective immediately upon passing. Sincerely, Anne W. Cantrell, CPA, Treasurer/Finance Director 311 S. Pollard Street Vinton, Virginia 24179 Phone: (540) 983-0608