Finding 2156 (2023-001)

2023-001 Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing No. 21.027 Significant Deficiency in Internal Control over Compliance and Noncompliance – H. Period of Performance Criteria: Pursuant to the Final Rule at 31 CFR section 35.5(a) for the Coronavirus State and Local Fiscal Recovery Funds, recipients may only use funds to cover costs incurred during the period beginning on March 3, 2021, and ending on December 31, 2024. Condition and Context: During our testing, we noted 1 of the 39 items selected for testing included costs outside of the period of performance. Our sample was not statistically valid. Cause and Effect: We noted internal controls surrounding the disbursement review process were appropriately designed and implemented but did not operate effectively for 1 of 39 disbursements selected for testing. This resulted in reimbursement of costs which occurred outside of the period of performance. Questioned Costs: $165,824 Recommendation: We recommend the IFA implement procedures to ensure the disbursement review process is operating effectively. Views of Responsible Officials and Planned Corrective Actions: The Indiana Finance Authority (IFA) agrees with the recommendation and plans to implement the revised process during 2023. The IFA has procedures in place to address these matters which includes the review of every disbursement. In this instance the IFA reviewed the existing Standard Operating Procedures and have edited them to reflect the date of the period of performance as part of the checklist for the program. The new program manager has been updated on the procedures and the importance of being in compliant with the federal guidelines. The funds were corrected subsequent to year end and paid with operating revenues during fiscal year 2024. The schedule of expenditures of federal award for the year ended June 30, 2023, included in this reporting package was also revised to remove the amount from federal expenditures.