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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): FY2024 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context Recipients are required to submit quarterly or annual 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. INDIANA STATE BOARD OF ACCOUNTS 21 TOWN OF FLORA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Town was classified as a metropolitan town 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. The annual report was to cover one calendar year and must be submitted to the Treasury by April 30, 2024. The Town submitted the required P&E report during the audit period timely, and the report agreed to the Town's records. However, there were no internal controls in place to prevent, or detect and correct, errors in the P&E report prior to submission. The Clerk-Treasurer prepared and submitted the P&E report without an oversight or review process in place. 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 The Town's management did not have properly designed internal controls in place to review reports prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the Town could not ensure that the report submitted was materially accurate and correct. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town establish a system of internal controls to provide for segregation of duties in the preparation and review of federal reports prior to submission. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.