EIN: 566001261
UEI: H4V3QM6MGH87
Audited by: Martin Starnes & Associates, CPAS, P.A.
Oversight agency: 21 [Department of the Treasury]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 24, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 24, 2025 (347 days ago).
What is a management decision? →The Town’s internal controls over procurement are not functioning as intended. Context: Of the 19 procurements during the current year valued at $2,799,733, we examined 4 (valued at $1,121,990) and determined that 4 (100% valued at $1,121,990) did not have documentation to verify that internal controls and compliance with procurement guidelines were being followed. The proper procurement documentation was not kept on file as required by procurement guidelines for use of COVID 19 – Coronavirus State and Local Fiscal Recovery funding. Effect: Purchases may be made without the proper procurement procedures being followed. Cause: Due to staff turnover at the Town, there were instances where proper procurement documentation was not kept on file. Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. The sample results identified $1,121,990 in known questioned costs. Recommendation: The Town should have a system in place to ensure that the procurement policies are implemented and functioning as intended. Views of Responsible Officials and Planned Corrective Actions: The Town agrees with this finding. Please refer to the Corrective Action Plan section of this report.
Show full finding ▾Hide full finding ▴Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that applicants have all required documentation in their file. In accordance with 42 USC Section 802(c) and 803(c) and Treasury’s Interim Final Rule and Final Rule, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Condition: The Town’s internal controls over procurement are not functioning as intended. Context: Of the 19 procurements during the current year valued at $2,799,733, we examined 4 (valued at $1,121,990) and determined that 4 (100% valued at $1,121,990) did not have documentation to verify that internal controls and compliance with procurement guidelines were being followed. The proper procurement documentation was not kept on file as required by procurement guidelines for use of COVID 19 – Coronavirus State and Local Fiscal Recovery funding. Effect: Purchases may be made without the proper procurement procedures being followed. Cause: Due to staff turnover at the Town, there were instances where proper procurement documentation was not kept on file. Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. The sample results identified $1,121,990 in known questioned costs. Recommendation: The Town should have a system in place to ensure that the procurement policies are implemented and functioning as intended. Views of Responsible Officials and Planned Corrective Actions: The Town agrees with this finding. Please refer to the Corrective Action Plan section of this report.
Finding: 2023-006 Name of Contact Person: Stephen Ford, Finance Director Corrective Action: The Town seeks to make the procurement process fair, open, and guided by a legal procurement process and related procedures. In May 2023, a new procurement policy and procedures was developed and adopted by Town Council. Prior to the new policy, the prior guiding document was flawed, unclear, and sometimes vague. The new policy addressed those deficiencies and the new policy will be used in subsequent years. Also, in regards to the some major purchases, the Town had to address some purchases that availability, accessibility to services (sole source), extension of services (labor and need), and Council oversight. However management and Town Council confirms the need for safeguarding and adhering to the procurement policy, and has implemented training among staff as well as requiring general contractor oversight. Proposed Completion Date: The Town will implement the above procedure immediately.
FAC accepted this audit on August 23, 2023 — management decision was due February 23, 2024.
The Town?s internal controls over procurement are not functioning as intended. Context: During our testing, we examined one purchase and determined that the required procurements guidelines were not followed. Expenditures were approved prior to payment; however proper procurement documentation was not kept on file as required by procurement guidelines for use of Clean Water State Revolving Fund funding. Effect: Purchases may be made without the proper procurement procedures being followed. Cause: Due to staff turnover at the Town, there were instances where proper procurement documentation was not kept on file. Questioned Cost: None. This finding represents an internal control issue; therefore, questioned costs are not applicable. Recommendation: The Town should have a system in place to ensure that the procurement policies are implemented and functioning as intended. Views of Responsible Officials and Planned Corrective Actions: The Town agrees with this finding. Please refer to the Corrective Action Plan section of this report. 129
Show full finding ▾Hide full finding ▴U.S. Department of Environmental Protection Agency Passed-through N.C. Department of Environmental Quality Program Name: Clean Water State Revolving Fund AL Number: 66.458 Grant Number: CS370489-05 Finding 2022-005: Procurement and Suspension and Debarment Material Weakness, Non-Compliance Criteria: In accordance with Section 602(b)(14) of the Clean Water Act, management should have an adequate system of internal control procedures in place to ensure that procurement policies are implemented and functioning as intended. Projects receiving Clean Water State Revolving Fund funding must comply with engineering procurement guidelines. To comply management must follow North Carolina General Statute 143-64.31, Article 3D procurement of architectural, engineering, and surveying services. Management must monitor activities under federal awards to assure compliance with federal requirements. Condition: The Town?s internal controls over procurement are not functioning as intended. Context: During our testing, we examined one purchase and determined that the required procurements guidelines were not followed. Expenditures were approved prior to payment; however proper procurement documentation was not kept on file as required by procurement guidelines for use of Clean Water State Revolving Fund funding. Effect: Purchases may be made without the proper procurement procedures being followed. Cause: Due to staff turnover at the Town, there were instances where proper procurement documentation was not kept on file. Questioned Cost: None. This finding represents an internal control issue; therefore, questioned costs are not applicable. Recommendation: The Town should have a system in place to ensure that the procurement policies are implemented and functioning as intended. Views of Responsible Officials and Planned Corrective Actions: The Town agrees with this finding. Please refer to the Corrective Action Plan section of this report. 129
Finding: 2022-005 Name of Contact Person: Stephen Ford, Finance Director Corrective Action: As stated before over the last two years, the Town has undergone a significant staff transition. The Town Manager, Finance Director, Town Clerk, HR Director, Water Customer Service Representative, the Front Office Staff, the Public Works Director, the Community Development Director, and several clerical and technical positions have transitioned. This has had a tremendous positive impact on the Town. But it has also caused some challenges in locating records and confirmation of procedures and actions. It is also believed that former management, department heads, and employees adhere to procurement procedures and requirements. However, records and documentation cannot be found providing supporting evidence of adherence and compliance. This process has been greatly improved and communicated throughout the organization.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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