FINDING 2022-003
Finding Subject: CDBG – Entitlement Grants Cluster—Program Income
Summary of Finding:
Condition and Context:
The County received program income through various loan programs it offered to qualifying
individuals. Once the County received a loan payment, the receipt was posted into th...
FINDING 2022-003
Finding Subject: CDBG – Entitlement Grants Cluster—Program Income
Summary of Finding:
Condition and Context:
The County received program income through various loan programs it offered to qualifying
individuals. Once the County received a loan payment, the receipt was posted into the financial
accounting system of the County and recorded in a grant fund. The amount received was also to
be recorded in the Department of Housing and Urban Development’s (HUD) Integrated
Disbursement & Information System (IDIS) website. The recorded program income in IDIS would
then appear on the Drawdown Report by Voucher Number report (PR07). No internal control
process had been established over the program income compliance requirement. One individual
was responsible for notifying the Auditor's office when program income money was received, in
order for it to be receipted in the County’s financial accounting system. The same individual was
also responsible for reporting the same on IDIS site. No controls were established to ensure the
program income that was recorded in the financial accounting system was also reported on IDIS
site and the PR07 report.
Additionally, four receipts totaling $38,960 were selected for testing from the County’s receipt
ledger. These four receipts were unable to be located on the PR07 report provided for audit. One of
the four receipts was recorded in the IDIS system after information regarding the receipt was
requested. The receipt was not in the PR07 report that had been provided for audit when we were
provided information documenting it being recorded in IDIS.
Furthermore, we were unable to verify the total amount recorded in receipt ledger to the total
reported on PR07 report. The County’s ledger was greater than the PR07 report by $30,324 and is
primarily attributed to under reporting of program income in IDIS as identified above.
Recommendation:
We recommended that the management of the County establish a system of internal controls
to ensure that all program income received is properly reported in the IDIS system and expended
prior to drawing down federal awards.
Contact Person Responsible for Corrective Action: Timothy A. Brown
Contact Phone Number and Email Address: 219-755-3225 and brownta@lakecountyin.org
Views of Responsible Officials:
LCCEDD concurs with the audit finding.
LAKE COUNTY
COMMUNITY ECONOMIC DEVELOPMENT DEPARTMENT
2293 N. Main Street - Crown Point, In 46307
Tel. (219) 755-3225 www.lakecountyin.org
INDIANA STATE BOARD OF ACCOUNTS
36
Description of Corrective Action Plan:
LCCEDD staff have already adopted changes in internal controls to correct the Program Income
reporting deficiencies. The process is as follows:
1. All incoming checks into the department are first reviewed by the Deputy Director. The Deputy
Director determines the source of income (i.e. CDBG, HOME, NSP) and the correct receipt type
(program income, repayment, homebuyer). The Deputy Director records the IDIS number of the
project on the check before giving it to the Fiscal Officer.
2. The Fiscal Officer records the receipt on an internal schedule of receipts and submits the check
to the County Auditor with the check deposit form with the IDIS number and correct fund and
account number for deposit.
3. Once the County Auditor posts the receipt to the County’s general ledger, the Fiscal Officer
records the Auditor’s receipt into HUD’s IDIS Online reporting system.
4. At the close of each quarter, the Fiscal Officer will prepare and submit the Cash on Hand Report
within thirty days of the close of the quarter. The Fiscal Officer will reconcile all expenses and
receipts posted in the County’s general ledger system with the receipts (report PR09) and
drawdown requests (report PR07) in HUD’s IDIS Online reporting system. Before submitting the
Cash on Hand Report in the IDIS Online system, the Deputy Director will review and approve the
prepared reconciliation and Cash on Hand Report. Any discrepancies between the two systems
will be reported to the Auditor and the Department Director to determine corrective actions.
5. Within 30 days of the close of each calendar quarter, the Fiscal Officer will submit the Cash on
Hand Report via IDIS Online. The Fiscal Officer will maintain a copy of the Cash on Hand report
and the corresponding reconciliation in their program files.
6. On an on-going basis, the Director will meet with Department staff to determine if training or
technical assistance is needed to complete HUD reporting requirements in a timely and accurate
manner.
Anticipated Completion Date:
A policy and procedure amendment will be written by the end of this year and presented to the
Lake County Redevelopment Commission for their March 2025 meeting for adoption.