FINDING 2023-002
Subject: Internal Controls over COVID-19 - Coronavirus State and Local
Fiscal Recovery Funds: American Rescue Plan Grant
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): FY2023
Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/
Cost Principles, Period of Performance, Reporting
Audit Finding: Material Weakness
INDIANA STATE BOARD OF ACCOUNTS 15
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
Prior to receipt of direct Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds,
all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included
the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their
award. Per the Agreement, the County was responsible for the effective administration of the federal award,
as well as the application of sound management practices and administration of federal funds in a manner
consistent with program objectives and terms and conditions of the award.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance
Recipients may use SLFRF award funds for any eligible expenses subject to the restrictions
set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the
American Rescue Plan Act of 2021 and amended by the Consolidated Appropriations Act of
2023. The SLFRF program provides substantial flexibility for each recipient to meet local needs
within seven separate eligible use categories. Recipients may use SLFRF award funds to:
Respond to the COVID-19 public health emergency and its negative economic impacts;
Respond to workers performing essential work during the COVID-19 public health emergency
by providing premium pay to eligible workers of eligible employers that have eligible
workers who are performing essential work;
Provide government services, to the extent COVID-19 caused a reduction in revenues
collected in the most recent full fiscal year of the recipient;
Make necessary investments in water, sewer, or broadband infrastructure;
Provide emergency relief from natural disasters or their negative economic impacts;
Fund eligible Surface Transportation projects; and
Fund Title I projects that are eligible activities under the Community Development Block
Grant and Indiana Community Development Block Grant programs.
Pursuant to the Agreement, the period of performance for the award began on the date the funds
were disbursed to the County and ends on December 31, 2026. Recipients may only use funds to cover
costs incurred during the period that began on June 7, 2021, and ends on December 31, 2024, for the first
four eligible uses, and from December 29, 2022 to December 31, 2024, for the remaining three eligible
uses. Recipients must liquidate all obligations incurred by December 31, 2024, under the award no later
than September 30, 2026, for Surface Transportation and Title I projects and December 31, 2026, for all
other projects.
As part of sound management of the federal award, the County was responsible for implementing
a system of internal controls that would ensure compliance with the applicable requirements. The County
had not properly designed or implemented such a system. There was no evidence of segregation of duties,
such as an oversight, review, or approval process, that would have ensured that expenditures of award
funds were made only for activities and costs that were allowable under the federal award and federal
regulations and that expenditures were made only for costs incurred within the period of performance.
INDIANA STATE BOARD OF ACCOUNTS
16
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Reporting
Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports
to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the
respective due dates, are based upon type of recipient and its population, as well as recipient's
allocation amount. Information to be reported includes projects funded, expenditures, and
contracts for the appropriate reporting period.
The County was classified as a county with a population below 250,000 residents that received
an allocation of less than $10 million in SLFRF award funds. As such, the initial P&E report,
covering the period from March 3, 2021 to March 31, 2022, was required to be submitted to the
Treasury by April 30, 2022. The subsequent annual reports are to cover one calendar year
and must be submitted to the Treasury by April 30 each year.
The County submitted the annual P&E report during the audit period; however, the County
Auditor prepared and submitted the report without a review or oversight process in place to
ensure that the reports were accurate.
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
A proper system of internal controls was not designed by management of the County. 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.
Effect
Without the proper implementation of an effectively designed system of internal controls, the internal
control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance.
Noncompliance with the provisions of federal statutes, regulations, and the terms and
conditions of the federal award could result in the loss of future federal funding to the County.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS 17
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the County design and implement a proper system of
internal controls, including policies and procedures that would provide segregation of duties to ensure
appropriate reviews, approvals, and oversight of federal expenditures and reports are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003
Subject: Internal Controls over COVID-19 - Coronavirus State and
Local Fiscal Recovery Funds: Lead Reduction Grant
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): FY23-24
Pass-Through Entity: Indiana State Department of Health
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Condition and Context
The County received a secondary award of Coronavirus State and Local Fiscal Recovery Funds
(SLFRF) that was passed through from the Indiana State Department of Health for purposes of lead
reduction in the County. The invoices submitted to the state to request reimbursement for the deliverables
performed by the County were the only reports required under this portion of the SLFRF award funding.
The County submitted one invoice for reimbursement to the state during the audit period; however,
one employee in the County Health Department prepared and submitted the invoice without evidence of an
oversight, review, or approval process to ensure that the report was accurate.
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). . . ."
INDIANA STATE BOARD OF ACCOUNTS
18
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
A proper system of internal controls was not designed by management of the County. 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.
Effect
Without the proper implementation of an effectively designed system of internal controls, the internal
control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance.
Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions
of the federal award could result in the loss of future federal funding to the County.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the County design and implement a proper system of
internal controls, including policies and procedures that would provide segregation of duties to ensure
appropriate reviews, approvals, and oversight of federal reports are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004
Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds:
American Resue Plan Grant - 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): FY2023
Compliance Requirement: Procurement and Suspension and Debarment
Audit Findings: Material Weakness, Modified Opinion
Condition and Context
The County elected to receive the standard revenue loss allowance, allowing the County to claim
its total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $8,812,591
as revenue loss to use for government services. As such, all SLFRF program funds during the audit period
were expended under the revenue loss eligible use category. The U.S. Department of the Treasury
(Treasury) determined that there are no subawards under this eligible use category, and that recipients'
use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal
program or purpose to carry out in the case of the revenue loss portion of the award.
INDIANA STATE BOARD OF ACCOUNTS
19
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Prior to entering into subawards and covered transactions with SLFRF 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 System (EPLS), collecting a certification
from that person, or adding a clause or condition to the covered transaction with that person. Due to the
Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the
County was only required to comply with suspension and debarment requirements related to covered
transactions.
Upon inquiry of the County to determine its policies and procedures related to suspension and
debarment requirements, the County stated that they did not have policies or procedures in place for
verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred,
or otherwise excluded or disqualified from participating in federal assistance programs or activities. The
County entered into covered transactions with four vendors during the audit period for goods or services
that equaled or exceeded $25,000 that were paid from SLFRF award funds. All four covered transactions,
totaling $1,661,247, were selected for testing. The County did not verify the vendors' suspension and
debarment status prior to payment for any of the four vendors.
The lack of internal controls and noncompliance were systemic issues 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). . . ."
31 CFR 19.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must
verify that the person with whom you intend to do business is not excluded or disqualified. You
do this by:
(a) Checking the EPLS; or
(b) Collecting a certification from that person if allowed by this rule; or
(c) Adding a clause or condition to the covered transaction with that person."
Cause
The County had not established a system of internal controls for suspension and debarment. The
County did not verify any covered transactions identified in testing that they were not suspended or
debarred prior to entering into the covered transaction.
INDIANA STATE BOARD OF ACCOUNTS
20
LAWRENCE 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 vendors paid with federal funds are eligible to participate in federal programs.
Any program funds the County used to pay vendors that have been suspended or debarred would be
unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the
provisions of federal statutes, regulations, and the terms and conditions or the federal award could result
in the loss of future federal funding to the County.
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 contractors, as appropriate, are not suspended, debarred,
or otherwise excluded prior to entering into any contracts with those vendors.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
21
FINDING 2023-002
Subject: Internal Controls over COVID-19 - Coronavirus State and Local
Fiscal Recovery Funds: American Rescue Plan Grant
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): FY2023
Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/
Cost Principles, Period of Performance, Reporting
Audit Finding: Material Weakness
INDIANA STATE BOARD OF ACCOUNTS 15
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
Prior to receipt of direct Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds,
all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included
the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their
award. Per the Agreement, the County was responsible for the effective administration of the federal award,
as well as the application of sound management practices and administration of federal funds in a manner
consistent with program objectives and terms and conditions of the award.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance
Recipients may use SLFRF award funds for any eligible expenses subject to the restrictions
set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the
American Rescue Plan Act of 2021 and amended by the Consolidated Appropriations Act of
2023. The SLFRF program provides substantial flexibility for each recipient to meet local needs
within seven separate eligible use categories. Recipients may use SLFRF award funds to:
Respond to the COVID-19 public health emergency and its negative economic impacts;
Respond to workers performing essential work during the COVID-19 public health emergency
by providing premium pay to eligible workers of eligible employers that have eligible
workers who are performing essential work;
Provide government services, to the extent COVID-19 caused a reduction in revenues
collected in the most recent full fiscal year of the recipient;
Make necessary investments in water, sewer, or broadband infrastructure;
Provide emergency relief from natural disasters or their negative economic impacts;
Fund eligible Surface Transportation projects; and
Fund Title I projects that are eligible activities under the Community Development Block
Grant and Indiana Community Development Block Grant programs.
Pursuant to the Agreement, the period of performance for the award began on the date the funds
were disbursed to the County and ends on December 31, 2026. Recipients may only use funds to cover
costs incurred during the period that began on June 7, 2021, and ends on December 31, 2024, for the first
four eligible uses, and from December 29, 2022 to December 31, 2024, for the remaining three eligible
uses. Recipients must liquidate all obligations incurred by December 31, 2024, under the award no later
than September 30, 2026, for Surface Transportation and Title I projects and December 31, 2026, for all
other projects.
As part of sound management of the federal award, the County was responsible for implementing
a system of internal controls that would ensure compliance with the applicable requirements. The County
had not properly designed or implemented such a system. There was no evidence of segregation of duties,
such as an oversight, review, or approval process, that would have ensured that expenditures of award
funds were made only for activities and costs that were allowable under the federal award and federal
regulations and that expenditures were made only for costs incurred within the period of performance.
INDIANA STATE BOARD OF ACCOUNTS
16
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Reporting
Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports
to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the
respective due dates, are based upon type of recipient and its population, as well as recipient's
allocation amount. Information to be reported includes projects funded, expenditures, and
contracts for the appropriate reporting period.
The County was classified as a county with a population below 250,000 residents that received
an allocation of less than $10 million in SLFRF award funds. As such, the initial P&E report,
covering the period from March 3, 2021 to March 31, 2022, was required to be submitted to the
Treasury by April 30, 2022. The subsequent annual reports are to cover one calendar year
and must be submitted to the Treasury by April 30 each year.
The County submitted the annual P&E report during the audit period; however, the County
Auditor prepared and submitted the report without a review or oversight process in place to
ensure that the reports were accurate.
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
A proper system of internal controls was not designed by management of the County. 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.
Effect
Without the proper implementation of an effectively designed system of internal controls, the internal
control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance.
Noncompliance with the provisions of federal statutes, regulations, and the terms and
conditions of the federal award could result in the loss of future federal funding to the County.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS 17
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the County design and implement a proper system of
internal controls, including policies and procedures that would provide segregation of duties to ensure
appropriate reviews, approvals, and oversight of federal expenditures and reports are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003
Subject: Internal Controls over COVID-19 - Coronavirus State and
Local Fiscal Recovery Funds: Lead Reduction Grant
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): FY23-24
Pass-Through Entity: Indiana State Department of Health
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Condition and Context
The County received a secondary award of Coronavirus State and Local Fiscal Recovery Funds
(SLFRF) that was passed through from the Indiana State Department of Health for purposes of lead
reduction in the County. The invoices submitted to the state to request reimbursement for the deliverables
performed by the County were the only reports required under this portion of the SLFRF award funding.
The County submitted one invoice for reimbursement to the state during the audit period; however,
one employee in the County Health Department prepared and submitted the invoice without evidence of an
oversight, review, or approval process to ensure that the report was accurate.
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). . . ."
INDIANA STATE BOARD OF ACCOUNTS
18
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
A proper system of internal controls was not designed by management of the County. 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.
Effect
Without the proper implementation of an effectively designed system of internal controls, the internal
control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance.
Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions
of the federal award could result in the loss of future federal funding to the County.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the County design and implement a proper system of
internal controls, including policies and procedures that would provide segregation of duties to ensure
appropriate reviews, approvals, and oversight of federal reports are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004
Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds:
American Resue Plan Grant - 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): FY2023
Compliance Requirement: Procurement and Suspension and Debarment
Audit Findings: Material Weakness, Modified Opinion
Condition and Context
The County elected to receive the standard revenue loss allowance, allowing the County to claim
its total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $8,812,591
as revenue loss to use for government services. As such, all SLFRF program funds during the audit period
were expended under the revenue loss eligible use category. The U.S. Department of the Treasury
(Treasury) determined that there are no subawards under this eligible use category, and that recipients'
use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal
program or purpose to carry out in the case of the revenue loss portion of the award.
INDIANA STATE BOARD OF ACCOUNTS
19
LAWRENCE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Prior to entering into subawards and covered transactions with SLFRF 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 System (EPLS), collecting a certification
from that person, or adding a clause or condition to the covered transaction with that person. Due to the
Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the
County was only required to comply with suspension and debarment requirements related to covered
transactions.
Upon inquiry of the County to determine its policies and procedures related to suspension and
debarment requirements, the County stated that they did not have policies or procedures in place for
verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred,
or otherwise excluded or disqualified from participating in federal assistance programs or activities. The
County entered into covered transactions with four vendors during the audit period for goods or services
that equaled or exceeded $25,000 that were paid from SLFRF award funds. All four covered transactions,
totaling $1,661,247, were selected for testing. The County did not verify the vendors' suspension and
debarment status prior to payment for any of the four vendors.
The lack of internal controls and noncompliance were systemic issues 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). . . ."
31 CFR 19.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must
verify that the person with whom you intend to do business is not excluded or disqualified. You
do this by:
(a) Checking the EPLS; or
(b) Collecting a certification from that person if allowed by this rule; or
(c) Adding a clause or condition to the covered transaction with that person."
Cause
The County had not established a system of internal controls for suspension and debarment. The
County did not verify any covered transactions identified in testing that they were not suspended or
debarred prior to entering into the covered transaction.
INDIANA STATE BOARD OF ACCOUNTS
20
LAWRENCE 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 vendors paid with federal funds are eligible to participate in federal programs.
Any program funds the County used to pay vendors that have been suspended or debarred would be
unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the
provisions of federal statutes, regulations, and the terms and conditions or the federal award could result
in the loss of future federal funding to the County.
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 contractors, as appropriate, are not suspended, debarred,
or otherwise excluded prior to entering into any contracts with those vendors.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
21