City of Abbeville, Georgia

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Cash Management. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(6) requires that each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Condition: We noted that the City did not have written procedures to implement the requirements of 2 CFR § 200.305 Payment during fiscal year 2023. Cause: The City was not aware of the requirement to have written procedures to implement the requirements of 2 CFR § 200.305 Payment. Effect: Failure to have written procedures to ensure the compliance with the 2 CFR § 200.305 Payment could result in federal award drawdown requests by the City to be overstated as to immediate cash flow needs, noncompliance with Uniform Guidance requirements, and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to the Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the City did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2023. Cause: The City was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.318(c)(1) requires that the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Condition: We noted that the City did not have written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts in fiscal year 2023. Cause: The City was not aware of the requirement to have written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Effect: Failure to have written standards of conduct could result in noncompliance with Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City develop written standards of conduct that include the requirements of 2 CFR § 200.318(c)(1). Views of Responsible Officials and Planned Corrective Action: The City will develop written standards of conduct in that satisfy the requirements of 2 CFR § 200.318(c)(1).

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.319(d) requires that the non-Federal entity must maintain written procedures for procurement transactions. Condition: We noted that the City did not have written procedures for procurement transactions that include the provisions required by the Procurement Standards 2 CFR § 200.318 through 2 CFR § 200.327 in fiscal year 2023. Cause: The City was not aware of the requirement to have written procedures for procurement transactions. Effect: Failure to have adequate written procedures for procurement transactions could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, other procurement requirements, and Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop adequate written policies and procedures for procurement transactions. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written policies and procedures which include the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Allowable Activities. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that federal awards are expended only for allowable activities. Condition: The City lacks sufficient controls over allowable activities to ensure that federal awards are expended only for allowable activities. Cause: The City did not design and implement controls over compliance with allowable activities. Effect or Potential Effect: Failure to have adequate internal controls over compliance with allowable activities could result in program assets used for activities that are not allowed by the programs requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City design and implement controls to: ensure that applicable award agreements and contracts are reviewed by appropriate personnel for specific allowable activities requirements, budget parameters, and those activities/costs which require pre-approval by the awarding agency and documents such features; and ensure appropriate personnel review and approve invoices for allowability, adherence to cost principles, accuracy and completeness. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will design and implement controls to ensure that federal awards are expended only for allowable activities.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Allowable Costs/Cost Principles. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Condition: The City lacks sufficient controls over allowable cost/cost principles to ensure that costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Cause: The City did not design and implement controls over compliance with allowable cost/cost principles. Effect or Potential Effect: Failure to have adequate internal controls over compliance with allowable cost/cost principles could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City design and implement controls to: Accountability for authorization is fixed in an individual who is knowledgeable of the requirements for determining allowable costs; and supporting documentation is compared to lists of allowable and unallowable expenditures. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will design and implement controls to ensure that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Procurement. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that procurement of goods and services are made in compliance with federal regulations and other procurement requirements, as applicable. Condition: The City lacks sufficient controls over procurement to ensure compliance with federal regulations and other procurement requirements, as applicable. Cause: The City did not design and implement controls over compliance with procurement. Effect or Potential Effect: Failure to have adequate internal controls over compliance with procurement could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, and other procurement requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City create and adopt an official written policy for procurement and contracts establishing contract files that document significant procurement history; methods of procurement authorized including selection of contract type, contractor selection or rejection, and the basis of contract price; verification that procurements provide full and open competition; requirements for cost or price analysis, including for contract modifications; obtaining and reacting to suspension and debarment certifications; and other applicable requirements for procurements under federal awards are followed. We also recommend that personnel with adequate knowledge and experience of responsibilities for procurements for federal awards review procurement and contracting decisions for compliance with federal procurement policies. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will develop written policies and procedures for procurement, including the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions. Management will evaluate the need to contract with local government consultants to perform control procedures where City personnel are not available or qualified to perform.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Cash Management. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(6) requires that each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Condition: We noted that the City did not have written procedures to implement the requirements of 2 CFR § 200.305 Payment during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures to implement the requirements of 2 CFR § 200.305 Payment. Effect: Failure to have written procedures to ensure the compliance with the 2 CFR § 200.305 Payment could result in federal award drawdown requests by the City to be overstated as to immediate cash flow needs, noncompliance with Uniform Guidance requirements, and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to the Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the City did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.318(c)(1) requires that the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Condition: We noted that the City did not have written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts in fiscal year 2022. Cause: The City was not aware of the requirement to have written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Effect: Failure to have written standards of conduct could result in noncompliance with Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City develop written standards of conduct that include the requirements of 2 CFR § 200.318(c)(1). Views of Responsible Officials and Planned Corrective Action: The City will develop written standards of conduct in that satisfy the requirements of 2 CFR § 200.318(c)(1).

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.319(d) requires that the non-Federal entity must maintain written procedures for procurement transactions. Condition: We noted that the City did not have written procedures for procurement transactions that include the provisions required by the Procurement Standards 2 CFR § 200.318 through 2 CFR § 200.327 in fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures for procurement transactions. Effect: Failure to have adequate written procedures for procurement transactions could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, other procurement requirements, and Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop adequate written policies and procedures for procurement transactions. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written policies and procedures which include the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Allowable Activities. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that federal awards are expended only for allowable activities. Condition: The City lacks sufficient controls over allowable activities to ensure that federal awards are expended only for allowable activities. Cause: The City did not design and implement controls over compliance with allowable activities. Effect or Potential Effect: Failure to have adequate internal controls over compliance with allowable activities could result in program assets used for activities that are not allowed by the programs requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City design and implement controls to: ensure that applicable award agreements and contracts are reviewed by appropriate personnel for specific allowable activities requirements, budget parameters, and those activities/costs which require pre-approval by the awarding agency and documents such features; and ensure appropriate personnel review and approve invoices for allowability, adherence to cost principles, accuracy and completeness. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will design and implement controls to ensure that federal awards are expended only for allowable activities.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Allowable Costs/Cost Principles. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Condition: The City lacks sufficient controls over allowable cost/cost principles to ensure that costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Cause: The City did not design and implement controls over compliance with allowable cost/cost principles. Effect or Potential Effect: Failure to have adequate internal controls over compliance with allowable cost/cost principles could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City design and implement controls to: Accountability for authorization is fixed in an individual who is knowledgeable of the requirements for determining allowable costs; and supporting documentation is compared to lists of allowable and unallowable expenditures. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will design and implement controls to ensure that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Procurement. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that procurement of goods and services are made in compliance with federal regulations and other procurement requirements, as applicable. Condition: The City lacks sufficient controls over procurement to ensure compliance with federal regulations and other procurement requirements, as applicable. Cause: The City did not design and implement controls over compliance with procurement. Effect or Potential Effect: Failure to have adequate internal controls over compliance with procurement could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, and other procurement requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City create and adopt an official written policy for procurement and contracts establishing contract files that document significant procurement history; methods of procurement authorized including selection of contract type, contractor selection or rejection, and the basis of contract price; verification that procurements provide full and open competition; requirements for cost or price analysis, including for contract modifications; obtaining and reacting to suspension and debarment certifications; and other applicable requirements for procurements under federal awards are followed. We also recommend that personnel with adequate knowledge and experience of responsibilities for procurements for federal awards review procurement and contracting decisions for compliance with federal procurement policies. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will develop written policies and procedures for procurement, including the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions. Management will evaluate the need to contract with local government consultants to perform control procedures where City personnel are not available or qualified to perform.