Audit 359998

Finding Reference Number: 2024-008. Federal Program: AL 21.027 – COVID-19 - Coronavirus State and Local Recovery Funds. Passed through Entity: County of St. Joseph, Indiana. Compliance Requirements: Procurement, Suspension, and Debarment. Type of Finding : Significant Deficiency in Internal Controls over Compliance. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires nonfederal entities to have a procurement policy in accordance with the Uniform Guidance requirements. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters a covered transaction with an entity at a lower tier, the nonfederal entity must verify the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition and Context: There is no procedure in place to determine whether vendors are suspended or debarred. For our sample of one, representing the entire population, the entity did not have documentation to support a check of a suspension and debarment on the vendor it entered into a transaction. Questioned Costs: No costs are required to be questioned as a result of this finding as none of the vendors or subrecipients involved were actually suspended or debarred. Cause: The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and debarment associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect or Potential Effect: Costs charged to federal awards could be paid to a person/vendor that has been debarred or suspended by the Federal government. This could lead to costs charged to the federal award to be subject to disallowance resulting in noncompliance. Recommendation: We recommend the Organization implement a policy over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of responsible officials: Management acknowledges the finding and understands the need to perform a review of vendors paid using federal grant funds to determine if they are suspended or debarred.

Finding Reference Number: 2024-009. Federal Program: AL 21.027 –COVID-19 - Coronavirus State and Local Recovery Funds. Passed through Entity: County of St. Joseph, Indiana. Compliance Requirements: Reporting. Type of Finding : Significant Deficiency in Internal Controls over Compliance. Criteria: Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions. Condition and Context: The report selected for testing, representing the entire population, did not included documentation that was subject to an independent review and approval prior to submission to detect and correct potential errors or omissions and verify timely submission. Questioned Costs: Not applicable. Cause: The Organization lacks a robust internal control process to ensure all financial reports required by federal grants are independently reviewed and approved before submission. This may be due to inadequate staffing, insufficient training, or lack of established procedures. Effect or Potential Effect: Without an independent review and approval process, there is an increased risk of errors or omissions in the financial reports, which could lead to non-compliance with federal reporting requirements. This could result in potential financial penalties, loss of funding, or damage to the Organization's reputation. Recommendation: The Organization should implement a formal internal control process that includes independent review and approval of all financial reports before submission. This process should be documented and communicated to all relevant staff. Additionally, the Organization should provide training to ensure that staff understand the importance of this control and how to properly execute it. Regular monitoring and periodic verification should be conducted to ensure compliance with this process. Views of responsible officials: Management acknowledges the finding and understands the need to complete and submit timely any required reporting to federal grantors as outlined by the notice of award, federal regulations, and/or grant agreement.

Finding Reference Number: 2024-008. Federal Program: AL 21.027 – COVID-19 - Coronavirus State and Local Recovery Funds. Passed through Entity: County of St. Joseph, Indiana. Compliance Requirements: Procurement, Suspension, and Debarment. Type of Finding : Significant Deficiency in Internal Controls over Compliance. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires nonfederal entities to have a procurement policy in accordance with the Uniform Guidance requirements. 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters a covered transaction with an entity at a lower tier, the nonfederal entity must verify the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition and Context: There is no procedure in place to determine whether vendors are suspended or debarred. For our sample of one, representing the entire population, the entity did not have documentation to support a check of a suspension and debarment on the vendor it entered into a transaction. Questioned Costs: No costs are required to be questioned as a result of this finding as none of the vendors or subrecipients involved were actually suspended or debarred. Cause: The Organization did not have a procedure in place to require documentation be maintained that the search for suspension and debarment associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect or Potential Effect: Costs charged to federal awards could be paid to a person/vendor that has been debarred or suspended by the Federal government. This could lead to costs charged to the federal award to be subject to disallowance resulting in noncompliance. Recommendation: We recommend the Organization implement a policy over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of responsible officials: Management acknowledges the finding and understands the need to perform a review of vendors paid using federal grant funds to determine if they are suspended or debarred.

Finding Reference Number: 2024-009. Federal Program: AL 21.027 –COVID-19 - Coronavirus State and Local Recovery Funds. Passed through Entity: County of St. Joseph, Indiana. Compliance Requirements: Reporting. Type of Finding : Significant Deficiency in Internal Controls over Compliance. Criteria: Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions. Condition and Context: The report selected for testing, representing the entire population, did not included documentation that was subject to an independent review and approval prior to submission to detect and correct potential errors or omissions and verify timely submission. Questioned Costs: Not applicable. Cause: The Organization lacks a robust internal control process to ensure all financial reports required by federal grants are independently reviewed and approved before submission. This may be due to inadequate staffing, insufficient training, or lack of established procedures. Effect or Potential Effect: Without an independent review and approval process, there is an increased risk of errors or omissions in the financial reports, which could lead to non-compliance with federal reporting requirements. This could result in potential financial penalties, loss of funding, or damage to the Organization's reputation. Recommendation: The Organization should implement a formal internal control process that includes independent review and approval of all financial reports before submission. This process should be documented and communicated to all relevant staff. Additionally, the Organization should provide training to ensure that staff understand the importance of this control and how to properly execute it. Regular monitoring and periodic verification should be conducted to ensure compliance with this process. Views of responsible officials: Management acknowledges the finding and understands the need to complete and submit timely any required reporting to federal grantors as outlined by the notice of award, federal regulations, and/or grant agreement.