Finding Text
FINDING 2024-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Lead Reduction Grant - 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): FY23-24 Pass-Through Entity: Indiana Department of Health Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context For the Lead Reduction Grant, recipients were required to submit quarterly reports through the end of the grant period. Although the required reports were submitted timely as required, there were no internal controls in place that would likely be effective in preventing, or detecting and correcting, noncompliance related to the report. One employee prepared and submitted the reports without any evidence of an oversight or review process. The lack of internal controls was a systemic issue that continued 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 LAWRENCE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed and implemented by management of the County, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. The County had not developed any policies and procedures requiring a secondary review of reports for accuracy prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the County cannot ensure that the reports submitted are materially accurate and that any potential errors would be identified and corrected in a timely manner. 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, to ensure that effective internal controls are implemented over all grant compliance requirements for reporting related to the Lead Reduction Grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.