Finding Text
FINDING 2025-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Period of Performance 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): FY2022 Compliance Requirement: Period of Performance Audit Findings: Material Weakness, Other Matters Condition and Context The County had not properly designed or implemented a system of internal controls to ensure that transactions made with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds occurred within the appropriate period of performance. The lack of effective internal controls resulted in items incurred after the period of performance in 4 of the 27 items tested. Further review indicated that the County used the 2025 appropriations as the obligation for some program expenditures. The lack of internal controls and noncompliance 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). . . ." 2 CFR 200.1 states in part: ". . . Financial obligations, when referencing a recipient's or subrecipient's use of funds under a Federal award, means orders placed for property and services, contracts and subawards made, and similar transactions that require payment. . . . INDIANA STATE BOARD OF ACCOUNTS 19 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Period of performance means the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Identification of the period of performance in the Federal award per § 200.211(b)(5) does not commit the awarding agency to fund the award beyond the currently approved budget period. . . . Unliquidated financial obligations means, for financial reports prepared on a cash basis, financial obligations incurred by the non-Federal entity that have not been paid (liquidated). . . ." Cause The County had a system of internal controls; however, the internal controls were not in place and operating effectively. Effect The failure to establish an effective system of internal controls enabled costs to be incurred under the federal program after the period of performance had ended. Questioned Costs We identified $25,837 in known questioned costs. Recommendation Management should develop and implement proper procedures and internal controls, including review and oversight of reports prior to their submission to the Department of the Treasury. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.