FINDING 2024-004
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): FY24
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
2023-005.
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 the P&E report by April 30, 2024, as required; however, a single employee
prepared and submitted the P&E report without a review or oversight process in place to prevent, or detect
and correct, errors. As a result, the following errors were noted:
The current period expenditures for ten projects tested were understated by $533,935. In
addition, current period expenditures for one project tested was overstated by $4,529.
The cumulative expenditures for six projects tested were understated by $151,208. In
addition, cumulative expenditures for three projects tested were overstated by $108,106.
INDIANA STATE BOARD OF ACCOUNTS
20
DECATUR COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The current period obligations for four projects tested were understated by $205,178. In
addition, current period obligations for four projects tested were overstated by $1,634,629.
The cumulative obligations for one project tested was understated by $100,000. In
addition, cumulative obligations for six projects tested were overstated by $2,007,842.
The lack of internal controls and noncompliance were systemic issues 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). . . ."
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
A proper system of internal controls, including policies and procedures, was not designed or
implemented by management of the County to prevent and detect errors on the P&E report prior to
submission. The County incorrectly reported projects that had been appropriated, but not yet obligated,
and amounts reported did not always agree to the County's records. The reports submitted were not
reviewed by a second person to identify these errors prior to submission.
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 accurately report current period obligations and cumulative
obligations when filing the P&E report for the period April 1, 2023 to March 31, 2024.
INDIANA STATE BOARD OF ACCOUNTS
21
DECATUR COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Noncompliance with the provisions of federal 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 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 of federal reports 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.