FAC Explorer

Audit 317960

FY End
2023-12-31
Total Expended
$2.36M
Findings
4
Programs
15
Organization: Morgan County (IN)
Year: 2023 Accepted: 2024-08-27
Auditor: Indiana State Board of Accounts

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
485145 2023-001 Material Weakness - AB
485146 2023-002 Material Weakness - I
1061587 2023-001 Material Weakness - AB
1061588 2023-002 Material Weakness - I

Programs

ALN Program Spent Major Findings
93.563 Child Support Enforcement $629,513 - 0
20.205 Highway Planning and Construction $624,663 Yes 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $508,714 Yes 2
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $168,595 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $113,966 - 0
93.788 Opioid Str $62,711 - 0
97.042 Emergency Management Performance Grants $44,828 - 0
93.069 Public Health Emergency Preparedness $44,274 - 0
20.600 State and Community Highway Safety $42,578 - 0
16.575 Crime Victim Assistance $36,943 - 0
97.047 Pre-Disaster Mitigation $24,881 - 0
93.658 Foster Care_title IV-E $20,501 - 0
16.588 Violence Against Women Formula Grants $17,852 - 0
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $10,530 - 0
16.607 Bulletproof Vest Partnership Program $4,818 - 0

Contacts

Name Title Type
GJLPX6EPJ1M7 Linda Pruitt Auditee
7653421001 Beth Kelley, Cpa, Cfe Auditor
No contacts on file

Notes to SEFA

Accounting Policies: Note 1. Summary of Significant Accounting Policies A. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of the County under programs of the federal government for the year ended December 31, 2023. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a select portion of the operations of the County, it is not intended to and does not present the financial position of the County. B. Other Significant Accounting Policies Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: Note 2. Indirect Cost Rate The County has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-001
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY-2023 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 13 MORGAN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County was awarded $13,691,662 in State and Local Fiscal Recovery Funds (SLFRF) to respond to the COVID-19 pandemic. The Board of County Commissioners were placed in charge of the grant funds and ensuring compliance with the grant. To ensure SLFRF expenditures were allowable and adhered to the cost principles, the County established the following process: first, the expenses were preapproved by the County Administrator; next, the claim was prepared by the Board of County Commissioners' Executive Assistant or the County Administrator; then the claim was reviewed and approved for compliance with the grant requirements by a County Commissioner; finally, the County Auditor approved the expenditure for payment. All expenditures paid with SLFRF funds were selected for testing to determine if the internal control was operating effectively. For 3 of the 22 expenditures tested, a County Commissioner did not sign the claim. The claims not signed by a County Commissioner were in June (1) and December (2). The lack of internal controls was isolated to the three claims identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not consistently documented at the County. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County review and strengthen its system of internal controls, to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 14 MORGAN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY-2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List (EPL), collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the County in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the County disclosed that there was not any procedure or internal control in place to verify that applicable vendors were not suspended or debarred from participation in federal programs prior to entering into a covered transaction. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The County, being unaware of the compliance requirement, had not designed or implemented a proper system of internal controls, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 15 MORGAN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the contractors paid with federal funds are eligible to participate in federal programs. Any program funds used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-001
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY-2023 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 13 MORGAN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County was awarded $13,691,662 in State and Local Fiscal Recovery Funds (SLFRF) to respond to the COVID-19 pandemic. The Board of County Commissioners were placed in charge of the grant funds and ensuring compliance with the grant. To ensure SLFRF expenditures were allowable and adhered to the cost principles, the County established the following process: first, the expenses were preapproved by the County Administrator; next, the claim was prepared by the Board of County Commissioners' Executive Assistant or the County Administrator; then the claim was reviewed and approved for compliance with the grant requirements by a County Commissioner; finally, the County Auditor approved the expenditure for payment. All expenditures paid with SLFRF funds were selected for testing to determine if the internal control was operating effectively. For 3 of the 22 expenditures tested, a County Commissioner did not sign the claim. The claims not signed by a County Commissioner were in June (1) and December (2). The lack of internal controls was isolated to the three claims identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls, which would include segregation of key functions, was not consistently documented at the County. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County review and strengthen its system of internal controls, to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 14 MORGAN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY-2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List (EPL), collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the County in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the County disclosed that there was not any procedure or internal control in place to verify that applicable vendors were not suspended or debarred from participation in federal programs prior to entering into a covered transaction. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The County, being unaware of the compliance requirement, had not designed or implemented a proper system of internal controls, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 15 MORGAN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the contractors paid with federal funds are eligible to participate in federal programs. Any program funds used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.