Audit 335349

FINDING 2021-005 Subject: Highway Planning and Construction - Procurement Federal Agency: U.S. Department of Transportation Federal Program: Highway Planning and Construction Cluster Assistance Listings Number: 20.205 Federal Award Numbers and Years (or Other Identifying Numbers): DES #1702829, DES #1801831, DES #1401027, DES #1592335, DES #1592338, DES #1902029, DES #1902197, DES #1902815, DES #1902818 Pass-Through Entity: Indiana Department of Transportation Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The County had not properly designed or implemented a system of internal controls that would be effective in preventing, or detecting and correcting, noncompliance to ensure that the Local Public Agency (LPA) Selection Review Checklist was properly supported. The lack of internal controls resulted in noncompliance. For consultant contracting (engineering and design related services) the Local Public Agency (LPA), (La Porte County) will create and send a Request for Proposal (RFP) to the Indiana Department of Transportation (INDOT), who will review and advertise them. Consultants can then respond to those RFPs by completing and submitting a Letter of Interest (LOI). After all LOIs are received and ranked, the County reports the number of LOIs received on the LPA Selection Review Checklist. The County did not keep or maintain the LOIs as reported to the INDOT on the LPA Selection Review Checklist. As a result, the number of LOIs documented on the checklist provided to the INDOT could not be verified or audited. In addition, we were unable to ensure the minimum number of LOIs were received to meet the procurement competition standards. 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 27 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 49 CFR 18.36(9) states: "Grantees and subgrantees will maintain records sufficient to detail the significant history of a procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." Cause Management did not develop a system of internal controls to maintain records sufficient to detail the history of a procurement as required by retaining the LOIs. Effect The failure to establish an effective internal control system places the County at risk of noncompliance with the grant agreement and the compliance requirements and resulted in a Qualified Opinion. 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 the County's management design and implement a proper system of internal controls to ensure the County retains the LOIs to ensure compliance with procurement requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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 Numbers and Years (or Other Identifying Numbers): Regular FY 2021, Revenue Loss FY 2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the procurement and suspension and debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to entering into subawards and covered transactions with Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, recipients are required to verify that 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 (e.g., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (ELPS), collection of a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. The County had not performed procedures to ensure the vendors were not suspended or debarred or otherwise excluded or disqualified from participation in federal assistance programs or activities during the audit period on 100 percent of the applicable two vendors that were paid with SLFRF funds, which totaled $657,583. 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 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 Management of the County did not develop a system of internal controls to ensure that policies and procedures were in place and followed, related to suspension and debarment. INDIANA STATE BOARD OF ACCOUNTS 29 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay contractors 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 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 establish a proper system of internal controls, including policies and procedures to ensure its compliance with requirements related to suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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 Numbers and Years (or Other Identifying Numbers): Regular FY 2021, Revenue Loss FY 2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the procurement and suspension and debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to entering into subawards and covered transactions with Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, recipients are required to verify that 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 (e.g., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (ELPS), collection of a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. The County had not performed procedures to ensure the vendors were not suspended or debarred or otherwise excluded or disqualified from participation in federal assistance programs or activities during the audit period on 100 percent of the applicable two vendors that were paid with SLFRF funds, which totaled $657,583. 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 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 Management of the County did not develop a system of internal controls to ensure that policies and procedures were in place and followed, related to suspension and debarment. INDIANA STATE BOARD OF ACCOUNTS 29 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay contractors 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 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 establish a proper system of internal controls, including policies and procedures to ensure its compliance with requirements related to suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-007 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting 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): Revenue Loss FY 2021 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirement related to the grant agreement and the reporting compliance requirement. Recipients were required to submit a one-time Interim report to the U.S. Department of the Treasury (Treasury). The respective due date was August 31, 2021, or 60 days after receiving funding if funding was received by October 15. The report was to show expenditures by category. The County submitted the required interim report during the audit period. The County's process for the completion and submission of the Interim Report was that the County Auditor prepared the Interim Report based on the County's records, without a proper oversight or review process in place prior to submission. INDIANA STATE BOARD OF ACCOUNTS 30 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Interim Report was determined to be materially misstated. The County understated the December 31, 2019 Base Year Revenues by $660,302. 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). . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause A proper system of internal controls was not designed or implemented by management of the County to ensure that policies and procedures were in place related to reporting to ensure the amounts reported were accurate. 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, noncompliance. Noncompliance with the provision of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of federal funding to the County. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 31 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the management of the County establish a system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the County provides the Treasury with complete and accurate information for all reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-005 Subject: Highway Planning and Construction - Procurement Federal Agency: U.S. Department of Transportation Federal Program: Highway Planning and Construction Cluster Assistance Listings Number: 20.205 Federal Award Numbers and Years (or Other Identifying Numbers): DES #1702829, DES #1801831, DES #1401027, DES #1592335, DES #1592338, DES #1902029, DES #1902197, DES #1902815, DES #1902818 Pass-Through Entity: Indiana Department of Transportation Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The County had not properly designed or implemented a system of internal controls that would be effective in preventing, or detecting and correcting, noncompliance to ensure that the Local Public Agency (LPA) Selection Review Checklist was properly supported. The lack of internal controls resulted in noncompliance. For consultant contracting (engineering and design related services) the Local Public Agency (LPA), (La Porte County) will create and send a Request for Proposal (RFP) to the Indiana Department of Transportation (INDOT), who will review and advertise them. Consultants can then respond to those RFPs by completing and submitting a Letter of Interest (LOI). After all LOIs are received and ranked, the County reports the number of LOIs received on the LPA Selection Review Checklist. The County did not keep or maintain the LOIs as reported to the INDOT on the LPA Selection Review Checklist. As a result, the number of LOIs documented on the checklist provided to the INDOT could not be verified or audited. In addition, we were unable to ensure the minimum number of LOIs were received to meet the procurement competition standards. 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 27 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 49 CFR 18.36(9) states: "Grantees and subgrantees will maintain records sufficient to detail the significant history of a procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." Cause Management did not develop a system of internal controls to maintain records sufficient to detail the history of a procurement as required by retaining the LOIs. Effect The failure to establish an effective internal control system places the County at risk of noncompliance with the grant agreement and the compliance requirements and resulted in a Qualified Opinion. 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 the County's management design and implement a proper system of internal controls to ensure the County retains the LOIs to ensure compliance with procurement requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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 Numbers and Years (or Other Identifying Numbers): Regular FY 2021, Revenue Loss FY 2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the procurement and suspension and debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to entering into subawards and covered transactions with Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, recipients are required to verify that 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 (e.g., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (ELPS), collection of a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. The County had not performed procedures to ensure the vendors were not suspended or debarred or otherwise excluded or disqualified from participation in federal assistance programs or activities during the audit period on 100 percent of the applicable two vendors that were paid with SLFRF funds, which totaled $657,583. 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 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 Management of the County did not develop a system of internal controls to ensure that policies and procedures were in place and followed, related to suspension and debarment. INDIANA STATE BOARD OF ACCOUNTS 29 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay contractors 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 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 establish a proper system of internal controls, including policies and procedures to ensure its compliance with requirements related to suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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 Numbers and Years (or Other Identifying Numbers): Regular FY 2021, Revenue Loss FY 2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the procurement and suspension and debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to entering into subawards and covered transactions with Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, recipients are required to verify that 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 (e.g., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (ELPS), collection of a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. The County had not performed procedures to ensure the vendors were not suspended or debarred or otherwise excluded or disqualified from participation in federal assistance programs or activities during the audit period on 100 percent of the applicable two vendors that were paid with SLFRF funds, which totaled $657,583. 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 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 Management of the County did not develop a system of internal controls to ensure that policies and procedures were in place and followed, related to suspension and debarment. INDIANA STATE BOARD OF ACCOUNTS 29 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay contractors 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 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 establish a proper system of internal controls, including policies and procedures to ensure its compliance with requirements related to suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2021-007 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting 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): Revenue Loss FY 2021 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirement related to the grant agreement and the reporting compliance requirement. Recipients were required to submit a one-time Interim report to the U.S. Department of the Treasury (Treasury). The respective due date was August 31, 2021, or 60 days after receiving funding if funding was received by October 15. The report was to show expenditures by category. The County submitted the required interim report during the audit period. The County's process for the completion and submission of the Interim Report was that the County Auditor prepared the Interim Report based on the County's records, without a proper oversight or review process in place prior to submission. INDIANA STATE BOARD OF ACCOUNTS 30 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Interim Report was determined to be materially misstated. The County understated the December 31, 2019 Base Year Revenues by $660,302. 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). . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause A proper system of internal controls was not designed or implemented by management of the County to ensure that policies and procedures were in place related to reporting to ensure the amounts reported were accurate. 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, noncompliance. Noncompliance with the provision of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of federal funding to the County. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 31 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the management of the County establish a system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the County provides the Treasury with complete and accurate information for all reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.