FINDING 2022-004
Finding Subject: CDBG – Entitlement Grants Cluster—Reporting
Summary of Finding:
Condition and Context:
The County did not have internal control procedures over the Quarterly Reports (PR29), IDIS
Section 3 Performance Report, and NSP Quarterly Reports. One individual prepared or gen...
FINDING 2022-004
Finding Subject: CDBG – Entitlement Grants Cluster—Reporting
Summary of Finding:
Condition and Context:
The County did not have internal control procedures over the Quarterly Reports (PR29), IDIS
Section 3 Performance Report, and NSP Quarterly Reports. One individual prepared or generated the
report without a review or oversight process.
Additionally, the County’s internal controls were not consistently documented over the draw down
requests for the CDBG grant during the audit period. The draw down requests were entered into IDIS,
which then becomes the basis for several of the reports. The control presented by the County was that
one individual prepared and entered the request, which would then be printed, and another individual
would review and sign the printed request to document the review. Of the thirteen reimbursement
requests tested, control documentation for eight of the requests were printed and signed during
current period, after the documentation was requested. The creation of documentation of the control
procedure did not support that internal controls were effective during the audit period.
Recommendation:
We recommended that the County's management design and implement a proper system of
internal controls, and retain documentation of its system of internal controls, to ensure compliance with
reporting requirements.
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.
Concurrence: The Fiscal Officer from the Audit Period was new to the position and her training was
focused on the changes to the financial systems at the county over the DRGR quarterly reporting of
NSP actions. Further, Finding 2022-003 also caused some of the reporting issues with CDBG of
having two CDBG funds and posting errors to these funds. The current LCCEDD Fiscal Officer found
the problems during the audit and corrective actions were done retroactively to address this part of the
finding with the drawdown requests.
The CDBG drawdowns were submitted into IDIS by the Fiscal Officer who printed out the drawdown
request. These printouts were then given to the Executive Director or the Deputy Director who then
went into IDIS and approved the drawdown request, then print out the IDIS drawdown approval and
return the request and the signed approval back to the Fiscal Officer.
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
38
Description of Corrective Action Plan:
LCCEDD staff have already adopted changes in internal controls to correct the CDBG reporting
deficiencies as described in Finding 2022-003. Further, management will oversee compliance with current
policies and the new quarterly reconciliations. LCCEDD policies will be updated to make the following
changes:
General Management and Oversight:
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.
NSP Quarterly Reports:
To be followed until the HUD field office indicates QPR reports are no longer needed due to grant
closeout:
1. Before the close of each month, the Fiscal Officer will create receipts and draws as needed in HUD’s
DRGR system to reflect funds receipted or expended by the County.
2. At the close of each quarter, the Fiscal Officer will prepare and submit the quarterly report in DRGR for
the NSP1 and NSP3 grant allocation. To prepare the report, the Fiscal Officer will reconcile all expenses
and receipts posted in the County’s general ledger system for the NSP programs with the receipts and
drawdown requests recorded in in HUD’s DRGR reporting system.
3. Before submitting the NSP QPR Report in the DRGR system, the Deputy Director will review and
approve the prepared reconciliation and QPR Report. Any discrepancies between the two systems will be
reported to the Auditor and the Department Director to determine corrective actions.
4. Within 30 days of the close of each calendar quarter, the Fiscal Officer will submit the NSP QPR
Report via DRGR. The Fiscal Officer will maintain a copy of the NSP QPR and the corresponding
reconciliation in their program files.
Cash on Hand Reports:
1. 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.
2. 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.
3. 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.
INDIANA STATE BOARD OF ACCOUNTS
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Section 3 Reporting:
1. As part of the application review, the Deputy Director will determine the applicability of the Section 3
requirements for each proposed project.
2. For projects where Section 3 is applicable, the Deputy Director will ensure that staff administering the
project are familiar with the Section 3 requirements and understand the forms and reporting required to
properly report Section 3, including the determination of total labor hours worked, labors hours worked by
Section 3 and Targeted Section 3 workers, and corresponding certifications.
3. The County will collect Section 3 reports from subrecipients administering projects throughout the
period of performance. If the project meets Section 3 benchmarks, the County will consider the activity to
be in full compliance with Section 3. If the project does not meet one of the Section 3 benchmarks, the
County will require reporting on the qualitative efforts that the subrecipient made to try to reach the
benchmarks.
4. Section 3 information collected for each project will be reported in IDIS Online. The Section 3
information must be reported annually before the submission of the annual report (CAPER) to HUD.
Anticipated Completion Date:
Part of the corrections have already been put into place and the Policy and Procedure Manual will be
amended in April of 2025 after the Lake County Redevelopment Commission adopts appropriate changes.