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STATE BOARD OF ACCOUNTS 302 West Washington Street Room E418 INDIANAPOLIS, INDIANA 46204-2769 FEDERAL COMPLIANCE AUDIT REPORT OF ALLEN COUNTY, INDIANA January 1, 2019 to December 31, 2019 FILED 09/29/2020 B55860 ---PAGE BREAK--- ---PAGE BREAK--- TABLE OF CONTENTS Description Page Schedule of Officials 2 Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards 3-4 Independent Auditor's Report on Compliance for the Major Federal Program; Report on Internal Control over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 5-7 Schedule of Expenditures of Federal Awards and Accompanying Notes: Schedule of Expenditures of Federal Awards 11-13 Notes to Schedule of Expenditures of Federal Awards 14 Schedule of Findings and Questioned Costs 15-18 Auditee-Prepared Document: Corrective Action Plan 20 Other Reports 21 1 INDIANA STATE BOARD OF ACCOUNTS 1 ---PAGE BREAK--- SCHEDULE OF OFFICIALS Office Official Term County Auditor Nicholas D. Jordan 01-19-17 to 12-31-22 County Treasurer William F. Royce 01-01-17 to 12-31-20 Clerk of the Circuit Court Lisbeth A. Borgmann 01-01-15 to 12-31-18 Christopher M. Nancarrow 01-01-19 to 12-31-22 County Sheriff David J. Gladieux 01-01-15 to 12-31-22 County Recorder Anita A. Mather 01-01-15 to 12-31-22 Circuit Court Judge Honorable Thomas J. Felts 01-01-15 to 12-31-20 Superior Court Judge Honorable Daniel G. Heath 01-01-15 to 12-31-20 President of the Board of County Commissioners Therese M. Brown 01-01-17 to 12-31-18 F. Nelson Peters 01-01-19 to 12-31-19 President of the County Council Therese M. Brown 01-01-20 to 12-31-20 Joel M. Benz 01-01-18 to 12-31-20 Thomas A. Harris 01-01-19 to 12-31-19 2 INDIANA STATE BOARD OF ACCOUNTS 2 ---PAGE BREAK--- STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2769 Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS TO: THE OFFICIALS OF ALLEN COUNTY, INDIANA We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Allen County (County), as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the County's basic financial statements and have issued our report thereon dated August 27, 2020. The opinion on the aggregate discretely presented component units was qualified because two discretely presented component units were not properly included in the County's financial statements. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the County's internal control over financial reporting (internal control) to determine the audit procedures that are appro- priate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we do not express an opinion on the effectiveness of the County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the County's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weak- nesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify certain deficiencies in internal control, described in the accompany- ing Schedule of Findings and Questioned Costs as item 2019-001, that we consider to be material weak- nesses. INDIANA STATE BOARD OF ACCOUNTS 3 ---PAGE BREAK--- INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Continued) Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regula- tions, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying Schedule of Findings and Questioned Costs as item 2019-001. Allen County's Response to Findings The County's response to the findings identified in our audit is described in the accompanying Corrective Action Plan. The County's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Paul D. Joyce, CPA State Examiner August 27, 2020, except for the Schedule of Expenditures of Federal Awards, for which the date is September 16, 2020 4 INDIANA STATE BOARD OF ACCOUNTS 4 ---PAGE BREAK--- STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2769 Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR THE MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE TO: THE OFFICIALS OF ALLEN COUNTY, INDIANA Report on Compliance for the Major Federal Program We have audited Allen County's (County) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on its major federal program for the year ended December 31, 2019. The County's major federal program is identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for the County's major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compli- ance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination of the County's compliance. Opinion on the Major Federal Program In our opinion, the County complied, in all material respects, with the types of compliance require- ments referred to above that could have a direct and material effect on its major federal program for the year ended December 31, 2019. 5 INDIANA STATE BOARD OF ACCOUNTS 5 ---PAGE BREAK--- INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR THE MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE (Continued) Report on Internal Control over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the County's internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effective- ness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reason- able possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compli- ance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weak- nesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. 6 INDIANA STATE BOARD OF ACCOUNTS 6 ---PAGE BREAK--- INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR THE MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE (Continued) Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated August 27, 2020, which contained unmodified opinions on those financial statements except for the aggregate discretely presented component units, for which the opinion was qualified. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively com- prise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Paul D. Joyce, CPA State Examiner September 16, 2020 7 INDIANA STATE BOARD OF ACCOUNTS 7 ---PAGE BREAK--- (This page intentionally left blank.) 8 INDIANA STATE BOARD OF ACCOUNTS 8 ---PAGE BREAK--- SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND ACCOMPANYING NOTES The Schedule of Expenditures of Federal Awards and accompanying notes presented were pre- pared by management of the County. The schedule and notes are presented as intended by the County. 9 INDIANA STATE BOARD OF ACCOUNTS 9 ---PAGE BREAK--- (This page intentionally left blank.) 10 10 INDIANA STATE BOARD OF ACCOUNTS 10 ---PAGE BREAK--- Pass-Through Federal Entity (or Other) Total Federal Grantor Agency CFDA Identifying Pass-Through Federal Awards Cluster Title/Program Title/Project Title Pass-Through Entity or Direct Grant Number Number To Subrecipient Expended Department of Agriculture Child Nutrition Cluster School Breakfast Program Indiana Department of Education 10.553 FY 2019 - $ 38,199 $ National School Lunch Program Indiana Department of Education 10.555 School Lunch FY 2019 - 69,129 Commodities FY 2019 - 10,949 Total - National School Lunch Program - 80,078 Total - Child Nutrition Cluster - 118,277 Total - Department of Agriculture - 118,277 Department of Justice Edward Bryne Memorial Justice Assistance Grant Program City of Fort Wayne 16.738 City of Fort Wayne and Allen County FY 2017 JAG Project 2017-DJ-BX-0436 - 11,554 FY 18 JAG Project Fort Wayne-Allen County 2018-DJ-BX-0648 - 12,207 Total - Edward Byrne Memorial Justice Assistance Grant Program - 23,761 Juvenile Justice and Delinquency Prevention Indiana Criminal Justice Institute 16.540 Check and Connect Contract #33749 - 117,378 Crime Victim Assistance Indiana Criminal Justice Institute 16.575 Domestic Violence VOCA-2018-00052 - 46,066 Violence Against Women Formula Grants Indiana Criminal Justice Institute 16.588 Domestic Violence D3-18-12241 - 41,290 State Criminal Alien Assistance Program Direct Grant 16.606 State Criminal Alien Assistance Program 2018-H0684-IN-AP - 9,949 Equitable Sharing Program Direct Grant 16.922 Asset Seizure - Sheriff FY 2019 - 630,536 Total - Department of Justice - 868,980 Department of Transportation Highway Planning and Construction Cluster Highway Planning and Construction Indiana Department of Transportation 20.205 Right of Way Des. 1382492 - 1,865 Right of Way Des. 1401273 - 16 Construction Engineering Des. 1297238 - 6,374 Construction Engineering Des. 1382493 - 78,179 ALLEN COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31, 2019 11 11 INDIANA STATE BOARD OF ACCOUNTS 11 ---PAGE BREAK--- Pass-Through Federal Entity (or Other) Total Federal Grantor Agency CFDA Identifying Pass-Through Federal Awards Cluster Title/Program Title/Project Title Pass-Through Entity or Direct Grant Number Number To Subrecipient Expended ALLEN COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31, 2019 Construction Engineering Des. 1382497 - 79,959 Construction Engineering Des. 1382818 - 21,604 Right of Way Des. 1401272 - 421,408 Preliminary Engineering Des. 1592872 - 56,548 NIRCC Des. 1600541 - 23,960 Construction Engineering Des. 1600575 - 42,503 Preliminary Engineering Des. 1702810 - 29,341 NIRCC Des. 1801295 - 813,357 Preliminary Engineering Des. 400582 - 125,683 Construction Engineering Des. 902238 - 59,979 Total - Highway Planning and Construction - 1,760,776 Total - Highway Planning and Construction Cluster - 1,760,776 Highway Safety Cluster State and Community Highway Safety City of Fort Wayne 20.600 Traffic Enforcement OPO 2019-00117 - 24,578 Traffic Enforcement SAVE-2019-00074 - 11,426 Total - State and Community Highway Safety - 36,004 National Priority Safety Programs City of Fort Wayne 20.616 Traffic Enforcement DUI 2019-00041 - 1,100 Total - Highway Safety Cluster - 37,104 Minimum Penalties for Repeat Offenders for Driving While Intoxicated City of Fort Wayne 20.608 Traffic Enforcement CHIRP-2020-00107 - 884 Total - Department of Transportation - 1,798,764 Environmental Protection Agency State Indoor Radon Grants Indiana Department of Health 66.032 State Indoor Radon Grants PO 20000927 - 3,000 Great Lakes Program Direct Grant 66.469 Maumee River Basin: Urban Pollution Management and Education Program 00E02233 - 117,781 Total - Environmental Protection Agency - 120,781 Election Assistance Commission 2018 HAVA Election Security Grants Indiana Secretary of State 90.404 Election Security Grant 2018 HAVA - 9,652 Total - Election Assistance Commission - 9,652 12 12 INDIANA STATE BOARD OF ACCOUNTS 12 ---PAGE BREAK--- Pass-Through Federal Entity (or Other) Total Federal Grantor Agency CFDA Identifying Pass-Through Federal Awards Cluster Title/Program Title/Project Title Pass-Through Entity or Direct Grant Number Number To Subrecipient Expended ALLEN COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31, 2019 Department of Health and Human Services Immunization Cooperative Agreements Indiana State Department of Health 93.268 Immunization PO 20002710 - 38,275 Block Grants for Prevention and Treatment of Substance Abuse Indiana State Department of Health 93.959 Syringe Service Grant 18537516 - 185,759 HIV/AIDS Program PO 18537516 FY 2019 - 27,979 Total - Block Grants for Prevention and Treatment of Substance Abuse - 213,738 PPHF Capacity Building Assistance to Strengthen Public Health Immunization Infrastructure and Performance financed in part by Prevention and Public Health Funds Indiana State Department of Health 93.539 Immunization PO 18560766 - 31,438 Child Support Enforcement Indiana Department of Child Services 93.563 Child Support Enforcement FY 2019 - 2,875,532 Refugee and Entrant Assistance State/Replacement Designee Administered Programs Indiana State Department of Health 93.566 Refugee Health screens PO 20001471 - 10,517 Refugee Health Screens PO 20003604 - 1,252 Total - Refugee and Entrant Assistance State/Replacement Administered Programs - 11,769 State Court Improvement Program Indiana Supreme Court 93.586 Superior Court-Family Relations Allen-CIP-2018BDT - 18,933 Superior Court-Family Relations Allen-CIP-2019BDT - 5,946 Total - State Court Improvement Program - 24,879 HIV Prevention Activities Health Department Based Indiana State Department of Health 93.940 HIV/AIDS Program PO 18537516 FY2018 - 2,970 HIV/Substance Abuse PO 20000165 - 28,323 HIV/Substance Abuse PO 20002966 - 27,111 Total - HIV Prevention Activities Health Department Based - 58,404 Total - Department of Health and Human Services - 3,254,035 Department of Homeland Security Emergency Management Performance Grants Indiana Department of Homeland Security 97.042 Homeland Security 20000793 - 98,570 Total - Department of Homeland Security - 98,570 Total federal awards expended - $ 6,269,059 $ The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards. 13 13 INDIANA STATE BOARD OF ACCOUNTS 13 ---PAGE BREAK--- ALLEN COUNTY NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Note 1. Summary of Significant Accounting Policies A. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of the County under programs of the federal government for the year ended December 31, 2019. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a select portion of the operations of the County, it is not intended to and does not present the financial position of the County. B. Other Significant Accounting Policies Expenditures reported on the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. Note 2. Indirect Cost Rate The County has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. 14 14 INDIANA STATE BOARD OF ACCOUNTS 14 ---PAGE BREAK--- ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I - Summary of Auditor's Results Financial Statements: Type of auditor's report issued: Name of Opinion Unit Opinion Issued Governmental activities Unmodified Business-type activities Unmodified Aggregate discretely presented component units Qualified Each major fund Unmodified Aggregate remaining fund information Unmodified Internal control over financial reporting: Material weaknesses identified? yes Significant deficiencies identified? none reported Noncompliance material to financial statements noted? yes Federal Awards: Internal control over major program: Material weaknesses identified? no Significant deficiencies identified? none reported Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? no Identification of Major Program and type of auditor's report issued on compliance for it: CFDA Number Name of Federal Program or Cluster Opinion Issued 93.563 Child Support Enforcement Unmodified Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? no Section II - Financial Statement Findings FINDING 2019-001 Subject: Preparation of the Schedule of Expenditures of Federal Awards Audit Findings: Material Weakness, Noncompliance 15 15 INDIANA STATE BOARD OF ACCOUNTS 15 ---PAGE BREAK--- ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County did not have a proper system of internal controls in place to prevent, or detect and correct, errors on the Schedule of Expenditures of Federal Awards (SEFA). The County had not established effective internal controls over the federal award information entered into the Indiana Gateway for Government Units financial reporting system, which was the source of the SEFA. An oversight or review process had been implemented; however, the review was not effective as evidenced by the errors on the SEFA identified below: Due to the lack of internal controls, the SEFA presented for audit contained the following errors: 1. The National School Lunch Program snack expenditures were understated by $9,967 and were incorrectly reported as Special Supplemental Nutrition Program for Women Infants and Children. 2. The National School Lunch Program commodities were understated by $10,949. 3. The Juvenile Justice and Delinquency Prevention grant expenditures were understated by $117,378. 4. The Highway Planning and Construction grant expenditures were overstated by $1,509,740. Audit adjustments were proposed, accepted by the County, and made to the SEFA presented in this report. Criteria The Indiana State Board of Accounts (SBOA) is required under Indiana Code 5-11-1-27(e) to define the acceptable minimum level of internal control standards. To provide clarifying guidance, the State Examiner compiled the standards contained in the manual, Uniform Internal Control Standards for Indiana Political Subdivisions. All political subdivisions subject to audit by SBOA are expected to adhere to these standards. The standards include adequate control activities. According to this manual: "Control activities are the actions and tools established through policies and procedures that help to detect, prevent, or reduce the identified risks that interfere with the achievement of objectives. Detection activities are designed to identify unfavorable events in a timely manner whereas prevention activities are designed to deter the occurrence of an unfavorable event. Examples of these activities include reconciliations, authorizations, approval processes, perfor- mance reviews, and verification processes. An integral part of the control activity component is segregation of duties. . . . There is an expectation of segregation of duties. If compensating controls are necessary, doc- umentation should exist to identify both the areas where segregation of duties are not feasible or practical and the compensating controls implemented to mitigate the risk. . . . The Green Book identifies a list of control activity categories that are meant only to illustrate the range and variety of control activities; the list is by no means all inclusive, but is reproduced here for reference purposes: . . . Accurate and timely recording of transactions. . . INDIANA STATE BOARD OF ACCOUNTS 16 ---PAGE BREAK--- ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.508 states in part: "The auditee must: . . . Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with § 200.510 Financial statements. . . 2 CFR 200.510(b) states: "Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: List individual Federal programs by Federal agency. For a cluster of programs, pro- vide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services. For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. Provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available. For a cluster of programs also provide the total for the cluster. Include the total amount provided to subrecipients from each Federal program. For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in § 200.414 Indirect (F&A) costs." Cause Management had not established a system of internal controls that would have ensured proper reporting of the SEFA. 17 17 INDIANA STATE BOARD OF ACCOUNTS 17 ---PAGE BREAK--- ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls in place that operated effectively, material misstate- ments of the SEFA remained undetected. The SEFA contained the errors identified in the Condition and Context. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Section III - Federal Award Findings and Questioned Costs No matters are reportable. 18 18 INDIANA STATE BOARD OF ACCOUNTS 18 ---PAGE BREAK--- AUDITEE-PREPARED DOCUMENT The subsequent document was provided by management of the County. The document is pre- sented as intended by the County. INDIANA STATE BOARD OF ACCOUNTS 19 ---PAGE BREAK--- CORRECTIVE ACTION PLAN FINDING 2019-001 Contact Person Responsible for Corrective Action: Nick Jordan, Auditor Contact Phone Number: [PHONE REDACTED] Views of Responsible Official: During 2019 there were a few oversights on the Schedule of Expenditures of Federal Awards. We inadvertently included the Community Crossing grants thinking they were Federal dollars as are most of the road funding grants. The Juvenile Justice grant was overlooked. The misclassification in the Child Nutrition Cluster was an error based on inconsistency in the past, but nevertheless still on the SEFA. The National School Lunch commodities are something that we will work with the departments on as that information has not historically been reported to us nor have we gone out to retrieve it. Description of Corrective Action Plan: Going forward we will be sure to inform the appropriate departments they need to report the commodities received for the National School lunch program and make sure that the reimbursements received are classified as National School lunch instead of WIC. The Juvenile Justice grant is added to the list of items we need to track and report for SEFA purposes. Overall, we will continue to be diligent in making sure we accurately capture and account for all expenditures necessary for the SEFA. Anticipated Completion Date: Ongoing and already completed for 2020 with exception of talking to departments about the commodities. Nick Jordan Allen County Auditor 8/12/2020 ALLEN COUNTY AUDITOR NICHOLAS D. JORDAN 20 INDIANA STATE BOARD OF ACCOUNTS 20 ---PAGE BREAK--- OTHER REPORTS In addition to this report, other reports may have been issued for the County. All reports can be found on the Indiana State Board of Accounts' website: http://www.in.gov/sboa/. 20 21 INDIANA STATE BOARD OF ACCOUNTS 21