FINDING 2023-001
Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities
Allowed or Unallowed, Allowable Costs/Cost Principles, Period of
Performance, and Procurement and Suspension and Debarment
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): PO 20011717
Pass-Through Entity: Indiana State Department of Health
Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period
of Performance, Procurement and Suspension and Debarment
Audit Findings: Material Weakness, Other Matters
Condition and Context
The County Department of Health, a department within the County, was awarded the Health Issues
and Challenges grant through the Indiana State Department of Health financed through the American
Rescue Plan Act for the purpose of funding programs that focus on the improvement of chronic disease,
specifically, elevated blood lead level reduction. The Health Issues and Challenges grant is a reimbursable
grant, whereby the County received reimbursement on a per-case basis at a stated rate for Case
Management and Environmental Investigation activities performed. The County Department of Health
received federal receipts related to the grant in the amount of $130,479 during 2023.
As part of sound management of the federal award, the County Department of Health was
responsible for implementing a system of internal controls that would ensure compliance with the applicable
requirements. The County Department of Health did not properly design or implement such a system.
Receipts of the program were adequately identified through the use of an account number within
the County Health Fund (285) in the County's ledger (ledger) which was unique to the Health Issues and
Challenges grant receipts. However, the ledger did not adequately identify the expenditures of the grant
program within the County Health Fund. Through inquiry with the County Department of Health employees
and review of unit-prepared support of grant expenditures, we determined expenditures were made with
grant funds during the audit period; however, we were unable to distinguish between the expenditures of
the Health Issues and Challenges grant and all other activities of the County Department of Health in the
County Health fund.
Due to the lack of separate identification of expenditures in the financial records, we were not able
to establish a population from which to audit the Health Issues and Challenges grant for compliance with
the following compliance requirements of the program:
Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
As such, the full award amount of $130,479, as reported on the Schedule of Expenditures of
Federal Awards, was determined to be questioned costs.
The lack of internal controls and noncompliance were systemic issues 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 200.300(b) states in part: "The non-Federal entity is responsible for complying with all
requirements of the Federal award. . . ."
2 CFR 200.302 states in part:
"(a) Each state must expend and account for the Federal award in accordance with state laws
and procedures for expending and accounting for the state's own funds. In addition, the state's
and the other non-Federal entity's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and conditions of
the Federal award, must be sufficient to permit the preparation of reports required by general
and program-specific terms and conditions; and the tracing of funds to a level of expenditures
adequate to establish that such funds have been used according to the Federal statutes,
regulations, and the terms and conditions of the Federal award. . . .
(b) The financial management system of each non-Federal entity must provide for the following
. . .
(1) Identification, in its accounts, of all Federal awards received and expended and the
Federal programs under which they were received. Federal program and Federal
award identification must include, as applicable, the Assistance Listings title and
number, Federal award identification number and year, name of the Federal agency,
and name of the pass-through entity, if any.
(2) Accurate, current, and complete disclosure of the financial results of each Federal
award or program in accordance with the reporting requirements set forth in
§§ 200.328 and 200.329. . . .
(3) Records that identify adequately the source and application of funds for federallyfunded
activities. These records must contain information pertaining to Federal
awards, authorizations, financial obligations, unobligated balances, assets, expenditures,
income and interest and be supported by source documentation.
(4) Effective control over, and accountability for, all funds, property, and other assets. . . ."
Cause
The County Department of Health was unable to differentiate expenditures made from federal and
non-federal funds within its ledger for the Heath Issues and Challenges grant.
Effect
Without the proper implementation of an effectively designed system of internal controls, a
population of expenditures associated with the Health Issues and Challenges grant could not be determined.
As such, the County Department of Health cannot ensure nor can we determine that expenditures
of the grant were not unallowable, within the proper period, and adhered to established practices and
policies.
Questioned Costs
We identified $130,479 in known questioned costs as noted in the Condition and Context.
Recommendation
We recommended that management of the County Department of Health establish a system of
internal controls to ensure that grant award funds are adequately accounted for and tracked in such a
manner as to determine the activity, receipts, and disbursements associated with the grant.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.