FINDING 2023-005
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): FY 2023
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
2022-003.
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 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 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 one annual P&E report during the audit period; however, the internal controls
in place were not effective to prevent, or detect and correct, errors. As a result, errors in reporting were
identified. The current period obligations and cumulative obligations were incorrectly reported. The County
was unable to provide supporting documentation for current period and cumulative obligations as reported.
The lack of effective internal controls and noncompliance were isolated to the one P&E report due
during the audit period.
INDIANA STATE BOARD OF ACCOUNTS
23
HARRISON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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
The County's oversight process for filing the P&E report for the period of April 1, 2022 to March 31,
2023, did not detect errors. Due to the timing of the P&E report submission and prior audit completion,
corrective actions from the previous year's finding, finding number 2022-003, could not be implemented to
correct noncompliance.
Effect
Without the proper implementation of an effectively designed system of internal controls, including
policies and procedures the internal control system cannot be capable of effectively preventing, or detecting
and correcting, material noncompliance. As such, the County did not report cumulative obligations and
current period obligations properly when filing the P&E report for the period April 1, 2022 to March 31, 2023.
Noncompliance with the provisions of federal statutes, 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 and the Treasury will not have
access to transparent and accurate information regarding expenditures of federal awards.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS 24
HARRISON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the County design and implement a proper system of
internal controls to provide for a segregation of duties in the preparation and review of federal reports to
ensure appropriate reviews, approvals, and oversight 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.