FINDING 2023-005
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): 2023
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Other Matters
Repeat Finding
This is a repeat finding from the immediately prior audit report. The prior audit finding number was
2022-004.
INDIANA STATE BOARD OF ACCOUNTS
23
JEFFERSON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to
the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates,
are based upon type of recipient and its population, as well as the recipient's allocation amount. Information
to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period.
The County was classified as a metropolitan county with a population below 250,000 residents that
received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery
Funds (SLFRF). As such, the initial P&E report, covering the period from March 3, 2021 to March 31, 2022,
was required to be submitted to the Treasury by April 30, 2022. The subsequent annual reports are to
cover one calendar year and must be submitted to the Treasury by April 30 each year.
The County submitted one P&E report during the audit period; however, the report was submitted
without a review or oversight process in place to prevent, or detect and correct, errors. As a result, errors
in reporting were identified. The cumulative obligations and expenditures and current period obligations
and expenditures were incorrectly reported. The cumulative obligations and expenditures and current
period obligations reported was the total amount of grant funds received to date instead of actual funds
obligated and expended. The current period expenditures reported equaled the total expenditures for 2022,
rather than expenditures that occurred during the reporting period of April through December of 2022, and
January through March of 2023.
The lack of internal controls and the failure to maintain adequate supporting documentation was
isolated to the annual P&E report.
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, . . ."
INDIANA STATE BOARD OF ACCOUNTS
24
JEFFERSON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
The County's oversight process for filing the P&E report for the period of April 1, 2022 to March 31,
2023, did not detect errors. Furthermore, due to the timing of the prior audit completion and the P&E report
submission due dates, corrective actions as outlined in the County's corrective action plan for item
2022-004 could not be implemented in time to correct the noncompliance for this audit period.
Effect
Without the proper implementation of an effectively designed system of internal controls, including
policies and procedures that provide segregation of duties and additional oversight as needed, the internal
control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance.
As such, the County did not report cumulative obligations and current period obligations properly
when filing the P&E report for the period April 1, 2022 to March 31, 2023.
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. In addition, not meeting
the SLFRF reporting requirements increases the likelihood that the public will not have access to transparent
and accurate information regarding expenditures of federal awards.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the County strengthen its system of internal controls to
provide for a segregation of duties in the preparation and review of federal reports to ensure appropriate
reviews, approvals, and oversight are taking place. We also recommended the development of policies
and procedures to ensure the County provides the Treasury with complete and accurate information for the
P&E report.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.