Finding 1075747 (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): PO 20011717 Pass-Through Entity: Indiana State Department of Health Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context The County Department of Health, a department within the County, was awarded the Health Issues and Challenges grant through the Indiana State Department of Health financed through the American Rescue Plan Act (ARPA) for the purposes of funding programs that focus on the improvement of chronic disease, specifically, elevated blood lead level reduction. As part of sound management of the federal award, the County Department of Health was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The County Department of Health did not properly design or implement such a system. The County Department of Health was required to submit data through the online portal, National Electronic Disease Surveillance System (NEDSS) Base System (NBS), monthly beginning in October 2022. The submitted data included program specific metrics relating to patient case management of certified Elevated Blood Lead Levels (EBLLs). The County Department of Health was also required to ensure environmental investigation activities completed, including risk assessments and environmental inspections, were documented in the Indiana I-LEAD database monthly by a licensed Lead Risk Assessor. Environmental investigation activities performed by the County Department of Health were documented in the Indiana I-LEAD database by a licensed Lead Risk Assessor who was an employee of the County Department of Health. Similarly, case management activities performed were documented in the NEDSS Base System (NBS). Once activities were documented in the Indiana I-LEAD database and NBS systems, the activities were further documented in a spreadsheet by the Lead Risk Assessor (for I-LEAD activities) and the Case Management Coordinator (for NBS activities). The spreadsheet was reviewed by the Director of the Environmental Services Division and the Finance Director monthly. The Finance Director then used the spreadsheet to prepare the monthly reimbursement requests and sent the monthly reimbursement requests to the Indiana State Department of Health. We determined through inquiry with the Director of the Environmental Services Division and the Finance Director that while there was a review of the monthly spreadsheet, there was not a second review of the spreadsheet back to the activities reported in the Indiana I-LEAD database and NBS for accuracy. Additionally, the Finance Director prepared and submitted the reimbursement requests to the State without a second review or oversight process in place to prevent, or detect and correct, errors prior to submission. The lack of internal controls 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, which would include segregation of key functions, was not designed by management of the County Department of Health to ensure the state was provided with complete and accurate information related to the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds award. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect management's statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County Department of Health design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure reports are complete and accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.