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Status of Corrective Action: Not Implemented Observations/Findings: The Board either did not prepare and/or approve an itemized budget or amend and update it as the project plan changed. We reviewed seven capital projects with expenditures totaling approximately $24.7 million. All seven projects were initiated after our last audit and expenditures were incurred during the period March 19, 2020 through December 19, 2024. While the Town Engineer (Engineer) prepared itemized budgets for two of the projects totaling approximately $14.4 million, the Board did not approve these budgets. Additionally, no budgets were prepared or approved for the other five capital projects with expenditures totaling over $10.3 million. The Engineer stated that he did not prepare budgets for these projects because generally he would only prepare an itemized budget for large capital projects for which the Town planned to borrow money. He stated that the projects that did not have an itemized budget were either funded with budgeted appropriations or with a small grant the Town received specifically for the project. However, although one of the five projects was financed with debt, officials did not have an itemized budget. Regardless of the project’s financing source and in the interest of transparency, the Board should approve itemized project budgets and include them in the meeting minutes to inform taxpayers and residents about a project’s scope, planned costs and funding sources. The Board did not receive or review monthly budget-to-actual reports. The Engineer stated he did not provide the Board with budget status reports because this information was included in the monthly “Application and Certification for Payment” (pay application) which was submitted to the Board to review and approve prior to payments being issued to vendors. The pay application included the original contract amount and any approved change orders for each vendor. However, without an approved budget including financing sources and total projected costs (which may include pay applications for multiple vendors and other costs such as engineering that do not have pay applications) Board members would have difficulty monitoring the project and would be unable to make informed decisions regarding unexpected costs or other project changes. For example, the Board adopted a bond resolution on March 22, 2021 for a water main replacement project with a maximum estimated cost of approximately $1.6 million. On December 18, 2023, the Board approved the final pay application for the primary contractor for a total contract cost of approximately $1.1 million which included change orders totaling $39,000. Without comparing the total project costs with a budget or reviewing all related project payments and pay applications, it appeared that the project was under budget. However, when we reviewed the project’s other pay applications and the total combined expenditures, the project’s total cost was approximately $2.1 million and exceeded the approved budget of $1.6 million by approximately $500,000. Recommendation 2 – Ensure Transparency to Taxpayers The Board should ensure all Board action and proceedings are recorded in the official Board minutes to ensure transparency to taxpayers. Status of Corrective Action: Not Implemented Observations/Findings: While the Board generally approved change orders and cost increases, officials did not include itemized budgets in the meeting minutes for any of the seven projects we 2