FINDING 2023-004
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): FY2021
Pass-Through Entity: Indiana Department of Health
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
2022-005.
Condition and Context
Recipients are required quarterly or annually to submit 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.
The County was classified as a county with a population below 250,000 residents that are allocated
more than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As
such, the P&E quarterly reports were to cover one calendar quarter and must be submitted to the Treasury
by the last day of the month following the end of the period covered.
The Couty's current policy and procedure for complying with reporting requirements is to have the
Director of Operations prepare the P&E reports with assistance from his Administrative Assistant, and then
the President of the Board of County Commissioners certifies the reports. The current internal control has
been determined to be ineffective since the P&E reports do not agree with the County's financial records.
The County submitted four P&E reports during the audit period; however, the errors, as identified
below, were noted on all four reports.
Quarterly Report: October 1, 2022 to December 31, 2022
Current period expenditures reported 7 projects with errors totaling $77,234. Cumulative
expenditures reported 22 projects with errors totaling $3,955,669.
Quarterly Report: January 1, 2023 to March 31, 2023
Current period expenditures reported 7 projects with errors totaling $173,169. Cumulative
expenditures reported 25 projects with errors totaling $2,633,217.
Quarterly Report: April 1, 2023 to June 30, 2023
Current period expenditures reported 2 projects with errors totaling $0, since expenditures
were posted to the incorrect project. Cumulative expenditures reported 24 projects with
errors totaling $2,372,744.
Quarterly Report: July 1, 2023 to September 30, 2023
Current period expenditures reported 3 projects with errors totaling $13,412. Cumulative
expenditures reported 26 projects with errors totaling $2,273,749.
The lack of effective internal controls and noncompliance were systemic issues throughout the
entire 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). . . ."
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
use of funds."
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, compliance financial data, in accordance with appropriate accounting standards and
principles. . . ."
Cause
The County's oversight process for filing the P&E reports did not detect errors. The errors were
the result of including expenditures from the incorrect time periods.
Effect
Without the proper implementation of an effectively designed system of internal controls, including
policies and procedures that provide segregation of duties and additional oversight as needed, the internal
control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance.
As such, the County did not report cumulative expenditures and current period expenditures
properly when filing the P&E reports during the audit period.
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
will not have access to transparent and accurate information regarding expenditures of federal awards.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the County strengthen its 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 reports.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.