Finding Text
FINDING 2024-001
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): FY 2024
Compliance Requirement: Reporting
Audit Finding: Significant Deficiency
INDIANA STATE BOARD OF ACCOUNTS
13
LAGRANGE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
An effective internal control system, which would include segregation of duties, was not in place at
the County in order to ensure compliance with requirements related to the grant agreement and the
Reporting compliance requirement.
Recipients are required to quarterly or annually submit 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) funding. As such, the initial P&E report, covering April 1, 2023 to March 31, 2024, was
required to be submitted to the Treasury by April 30, 2024.
The County submitted the annual P&E report during the audit period. The County's process for the
completion and submission of the P&E reports was that the County Auditor prepared the P&E report based
on the County's financial ledgers without a proper oversight or review process in place 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 was not designed or implemented by management of the
County to ensure that P&E reports were prepared by one individual and reviewed by another individual
before submission to the Treasury.
Effect
Without the proper implementation of an effectively designed system of internal controls, errors
could occur and remain undetected. As such, the County cannot ensure that the reports submitted are
materially accurate and correct.
INDIANA STATE BOARD OF ACCOUNTS
14
LAGRANGE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the County establish a system of internal controls and
develop policies and procedures over the preparation and review of federal reports to ensure appropriate
reviews, approval, 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 all
reports.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.