Finding Text
FINDING 2021-007
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): Revenue Loss FY 2021
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Other Matters
Condition and Context
An effective internal control system, which would include segregation of duties, was not in place at
the County in order to ensure compliance with requirement related to the grant agreement and the reporting
compliance requirement.
Recipients were required to submit a one-time Interim report to the U.S. Department of the Treasury
(Treasury). The respective due date was August 31, 2021, or 60 days after receiving funding if funding
was received by October 15. The report was to show expenditures by category.
The County submitted the required interim report during the audit period. The County's process
for the completion and submission of the Interim Report was that the County Auditor prepared the Interim
Report based on the County's records, without a proper oversight or review process in place prior to
submission.
INDIANA STATE BOARD OF ACCOUNTS 30
LA PORTE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The Interim Report was determined to be materially misstated. The County understated the
December 31, 2019 Base Year Revenues by $660,302.
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
A proper system of internal controls was not designed or implemented by management of the
County to ensure that policies and procedures were in place related to reporting to ensure the amounts
reported were accurate.
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, noncompliance.
Noncompliance with the provision of federal statutes, regulations, and the terms and conditions of
the federal award could result in the loss of federal funding to the County.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS 31
LA PORTE COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that the management of the County establish a system of internal controls and
develop policies and procedures over the preparation and review of federal reports to ensure appropriate
reviews, approval, and oversight are taking place. Additionally, management should develop policies and
procedures to ensure that the County provides the Treasury with complete and accurate information for all
reports.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.