Finding 1061360 (2023-002)

FINDING 2023-002 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): 64313 Pass-Through Entity: Indiana State Department of Health Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context Recipients are required to submit program invoices to the Indiana Department of Health (IDOH) via email. Information to be reported includes, but is not limited to, the number of cases performed during the grant's period of performance. The County submitted the program invoices as required; however, there were no internal controls in place that would likely be effective in preventing, or detecting and correcting, noncompliance related to the reporting requirements. The program invoices were prepared and submitted by one employee without an oversight, review, or approval process to ensure accuracy and completeness. INDIANA STATE BOARD OF ACCOUNTS 16 WHITLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls over program invoices 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 and implemented by management of the County, which would include segregation of key functions. 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the County cannot ensure that the reports submitted are materially accurate and correct. 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, to ensure that the County provides the IDOH with complete and accurate information for the program invoices. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.