FINDING 2023-003
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): CY2022
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Modified Opinion
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 on the type of recipient and the recipient's 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. 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.
INDIANA STATE BOARD OF ACCOUNTS
18
CLINTON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The County submitted one P&E report during the audit period, which was obtained from the
Treasury's website. Although one employee prepared the P&E report and another reviewed the entries,
the system of internal controls was not effective in preventing, detecting, or correcting errors.
The data submitted included amounts which should not have been included and amounts which
were not supported by the County's records. Errors identified included the following:
Total Cumulative Obligations were overstated by $907,630.
Total Cumulative Expenditures were overstated by $4,332,524.
The lack of effective internal controls and noncompliance were isolated to the P&E report submitted
during 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). . . ."
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, . . ."
Cause
Although a system of internal controls over the P&E report was designed by management, which
included segregation of duties, it did not ensure that the County provided the Treasury with complete and
accurate information related to the SLFRF awards. 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 controls, and procedures
should consist of actions that would implement these policies.
INDIANA STATE BOARD OF ACCOUNTS
19
CLINTON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. 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, by reporting erroneous data, increases
the likelihood that the public and the Treasury 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 design and implement a proper system of
internal controls that would ensure appropriate reviews, approvals and oversight are taking place.
Additionally, management should develop policies and procedures to ensure that 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.