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STATE BOARD OF ACCOUNTS 302 West Washington Street Room E418 INDIANAPOLIS, INDIANA 46204-2769 FEDERAL SINGLE AUDIT REPORT OF ALLEN COUNTY, INDIANA January 1, 2018 to December 31, 2018 B53337 FILED 09/17/2019 ---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 10-11 Notes to Schedule of Expenditures of Federal Awards 12 Schedule of Findings and Questioned Costs 13 Auditee-Prepared Document: Summary Schedule of Prior Audit Findings 16-17 Other Reports 18 ---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 Joel M. Benz 01-01-18 to 12-31-18 Thomas A. Harris 01-01-19 to 12-31-19 ---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, 2018, 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 15, 2019. The opinion on the aggregate discretely presented component units was qualified because a discretely presented com- ponent unit was 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 entity'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. Given these limitations, during our audit we did not identify any de- ficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. ---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, regulations, 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 no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 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 15, 2019 ---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, 2018. 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 compliance 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 circum- stances. 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, 2018. ---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 effec- tiveness of internal control over compliance. Accordingly, we do not express an opinion on the effec- tiveness 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 de- ficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable 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 com- pliance 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. 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, 2018, and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated August 15, 2019, 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 comprise 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 ---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) 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 August 15, 2019 ---PAGE BREAK--- (This page intentionally left blank.) ---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. ---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 Subrecipients Expended Department of Agriculture Child Nutrition Cluster School Breakfast Program Indiana Department of Education 10.553 FY 2018 - $ 43,137 $ Total - School Breakfast Program - 43,137 National School Lunch Program Indiana Department of Education 10.555 FY 2018 - 83,018 Commodities FY 2018 - 10,387 Total - National School Lunch Program - 93,405 Total - Child Nutrition Cluster - 136,542 Total - Department of Agriculture - 136,542 Department of Justice Crime Victim Assistance Indiana Criminal Justice Institute 16.575 D3-17-11386 - 35,765 Total - Crime Victim Assistance - 35,765 Violence Against Women Formula Grants Indiana Criminal Justice Institute 16.588 D3-17-11331 - 28,348 Total - Violence Against Women Formula Grants - 28,348 Equitable Sharing Program Direct Grant 16.922 Prosecutor FY 2018 - 10,000 Sheriff FY 2018 - 317,639 Total - Equitable Sharing Program - 327,639 Total - Department of Justice - 391,752 Department of Transportation Highway Planning and Construction Cluster Highway Planning and Construction Indiana Department of Transportation 20.205 NIRCC DES 1600541 - 673,957 NIRCC DES 1701253 - 47,744 NIRCC DES 1801295 - 127,995 NIRCC DES 1801514 - 6,173 NIRCC EDS A249-15-ON150059 - 13,375 NIRCC EDS A249-18-ON180095 - 28,600 Preliminary Engineering Des. 400582 - 64,805 Construction Engineering Des. 400584 - 125,079 Preliminary Engineering Des. 400584 - 1,707 Utility Relocation Des. 902238 - 13,575 Construction Engineering Des. 902238 - 33,101 Construction Engineering Des. 1297238 - 129,054 Final Project close out Des. 1300311 - 6,142 Preliminary Engineering Des. 1382100 - 40,918 Right of Way Des. 1382492 - 48,721 Construction Engineering Des. 1382493 - 330,973 Preliminary Engineering Des. 1382497 - 3,112 Construction Engineering Des. 1382497 - 127,128 Preliminary Engineering Des. 1382818 - 594 Construction Engineering Des. 1382818 - 116,857 Construction Engineering Des. 1383353 - 25,000 Right of Way Des. 1401272 - 103,400 Preliminary Engineering Des. 1592872 - 399,751 Construction Engineering Des. 1600575 - 15,284 Total - Highway Planning and Construction - 2,483,045 Total - Highway Planning and Construction Cluster - 2,483,045 Highway Safety Cluster State and Community Highway Safety City of Fort Wayne 20.600 D3-18-11876 - 19,476 Total - State and Community Highway Safety - 19,476 Total - Highway Safety Cluster - 19,476 ALLEN COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2018 -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 Subrecipients Expended ALLEN COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2018 Minimum Penalties for Repeat Offenders for Driving While Intoxicated City of Fort Wayne 20.608 D3-18-12042 - 1,962 Total - Minimum Penalties for Repeat Offenders for Driving While Intoxicated - 1,962 Total - Department of Transportation - 2,504,483 Environmental Protection Agency State Indoor Radon Grants Indiana State Department of Health 66.032 PO 18521155 - 3,000 Total - State Indoor Radon Grants - 3,000 Great Lakes Program Direct Grant 66.469 00E02233 - 13,623 Total - Great Lakes Program - 13,623 Total - Environmental Protection Agency - 16,623 Department of Health and Human Services 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 PO 17532510 - 44,645 PO 18560766 - 50,078 Total - PPHF Capacity Building Assistance to Strengthen Public Health Immunization Infrastructure and Performance financed in part by Prevention and Public Health Funds - 94,723 Child Support Enforcement Indiana Department of Child Services 93.563 FY 2018 - 2,731,918 Total - Child Support Enforcement - 2,731,918 Refugee and Entrant Assistance State/Replacement Designee Administered Programs Indiana Family and Social Services Administration 93.566 PO 18528589 - 6,523 Total - Refugee and Entrant Assistance State/Replacement Designee Administered Programs - 6,523 State Court Improvement Program Indiana Supreme Court 93.586 CIP-2017BT - 32,119 Total - State Court Improvement Program - 32,119 HIV Prevention Activities Health Department Based Indiana State Department of Health 93.940 PO 18537516 - 75,621 PO 18503481 - 29,423 PO 20000165 - 30,136 Total - HIV Prevention Activities Health Department Based - 135,180 Total - Department of Health and Human Services - 3,000,463 Department of Homeland Security Emergency Management Performance Grants Indiana Department of Homeland Security 97.042 EMC-2017-EP-00002 - 93,301 Total - Emergency Management Performance Grants - 93,301 Pre-Disaster Mitigation Indiana Department of Homeland Security 97.047 EMC-2017-PC-0004 - 16,738 Total - Pre-Disaster Mitigation - 16,738 Total - Department of Homeland Security - 110,039 Total federal awards expended - $ 6,159,902 $ The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards. -11- ---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, 2018. 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 cash 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 reim- bursement 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. -12- ---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: Unmodified for all opinion units except the aggregate discretely presented component units, which was qualified Internal control over financial reporting: Material weaknesses identified? no Significant deficiencies identified? none reported Noncompliance material to financial statements noted? no Federal Awards: Internal control over major programs: 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: Name of Federal Program or Cluster Opinion Issued Highway Planning and Construction Cluster 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 No matters are reportable. Section III - Federal Award Findings and Questioned Costs No matters are reportable. -13- ---PAGE BREAK--- (This page intentionally left blank.) -14- ---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. -15- ---PAGE BREAK--- -16- ---PAGE BREAK--- ALLEN COUNTY DEPARTMENT OF PUBLIC PURCHASE Dawn Rose, Director Citizens Square Phone: (26O)449-7567 200 E. Berry St., Suite 495 F ax: (260)449-a978 FortWayne,IN46802 wrvw.co.allen.in.us/purchasing Finding 2017-002 Fiscal year in the finding initially occurred: 2016 Direct Grant from the Department of Justice Contact person responsible for corrective action: Dawn Rose Contact phone n umber : 260-449-7 222 Status of Audit Finding: When an Allen County department requests the Department of Public Purchase place an order for goods or services over $25,000 and has informed the purchasing department that federal funds will be used to pay for said order, the buyer requests our administrative assistant to confirm the vendor has not been excluded or disqualifled through SAM before placing the order with the vendor. The administratlve assistant prints the results of the search and forwards to the buyer. This document is filed with the purchase order. t4ir,u-'\L ture gna S ( 1 \ \ N v \c i,LC (Title) (Date) q I ) a\ \ i t -17- ---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/. -18-