EIN: 356000168
UEI: P6SHCPGVH8B7
Data as of August 20, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 29, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 29, 2026 (130 days from today).
What is a management decision? →FINDING 2024-003 Subject: Highway Planning and Construction - Equipment and Real Property Management Federal Agency: Department of Transportation Federal Program: Highway Planning and Construction Assistance Listings Number: 20.205 Federal Award Number and Year (or Other Identifying Number): DES #9981680 Pass-Through Entity: Indiana Department of Transportation Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Highway Planning and Construction grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. In addition, a complete physical inventory of the property must be taken every two years and reconciled with the detailed listing. The capital asset listing is to include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The County purchased $734,389 of right-of-way for the Veterans Memorial Trail project. The project had a 20 percent local match; thus, the Highway Planning and Construction grant portion was $587,511. The right-of-way purchase should have been recorded as capital assets purchased with 80 percent federal funding. However, the County did not include the right-of-way purchased in the capital asset listing. The lack of internal controls and noncompliance were isolated to DES #9981680. 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 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of dunking for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause Effective internal controls were not in place to ensure that all capital assets purchased with federal funds, including rights-of-ways, were added to the County's capital asset listing. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Finding Subject: Highway Planning and Construction - Equipment and Real Property Management Contact Person Responsible for Corrective Action: Craig Zandstra Contact Phone Number and Email Address: 219-945-0543 Ext 234, craigz@lakecountyparks.com Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The County will implement a process of better tracking of asset purchases paid with the Highway Planning and Construction grant. Will ensure that the list is updated every year. Anticipated Completion Date: December 2026
FINDING 2024-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): Contract #65873, SLT-3157 Pass-Through Entity: Indiana Department of Natural Resources Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-004. Condition and Context Procurement The County did adopt an applicable federal purchasing policy. The Lake County Indiana Purchasing Manual for Supplies, Services, and Public Works states on page 19 that "Federal funds less than $25,000 will obtain 3 quotes by telephone or fax and obtain board approval. . . ." The Lake County Indiana Purchasing Manual for Supplies, Services, and Public Works also states on page 19 that "Federal funds more than $25,000 but less than $50,000 will invite 3 quotes at an open public meeting." The federal procurement requirement, per the Code of Federal Regulations section 200.320, states that for small purchases, price or rate quotations must be obtained from an adequate number of qualified sources. In 2024, the County had two vendors. One was paid $27,963, and one was paid $12,970 for a total of $40,933 from the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) under Contract #65873 from the Indiana Department of Natural Resources. However, the County did not obtain price or rate quotes for the applicable vendors under the small purchase threshold as required per its purchasing policy or the federal requirements. Suspension and Debarment Prior to entering into subawards and covered transactions with the SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. The County did not have policies or procedures in place related to the suspension and debarment requirements for the SLFRF funds. Three covered transactions totaling $7,530,563 paid from the SLFRF funds were identified. Documentation to show that suspension and debarment was verified prior to entering into contracts with these three vendors could not be provided by the County. The amounts for which suspension and debarment were not verified for Contract #65873 from the Indiana Department of Natural Resources and the SLT-3157 directly from the U.S. Department of the Treasury were $27,963 and $7,502,600, respectively. The lack of internal controls and noncompliance were isolated to the transactions identified above. 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 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The County's purchasing policy does not provide procedures on how the County will ensure the appropriate number of quotes will be obtained for small purchases or how the County will ensure compliance with the suspension and debarment requirements. Effect Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment or loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation Management of the County should develop procedures to ensure the appropriate procurement methods are used for items or services procured that are within the small purchase threshold and to ensure vendors are not suspended or debarred when expending federal funds. Appropriate documentation should be maintained to ensure compliance with procurement and suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Finding Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Contact Person Responsible for Corrective Action: Burzynski Thaddeus Contact Phone Number and Email Address: 219-755-3200, burzytx@lakecountyin.org Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: As this finding is shared between The Lake County Board of Commissioners and the Lake County Parks & Recreation Department, both departments will develop procedures to ensure the appropriate procurement methods are used for vendors that are within the Small Purchase Threshold. Both departments will also ensure that vendors are not suspended or debarred when expanding federal funds. Lastly, appropriate documentation will be maintained to ensure compliance with procurement, suspension and debarment in the future. Anticipated Completion Date: December 2026
2023-004
FINDING 2024-005 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: U.S. 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): SLT-3157 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 2023-005. Condition and Context Recipients are required to submit quarterly or annual 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 that exceeds 250,000 residents. As such, the County was required to submit quarterly P&E reports in 2024. The amounts submitted for three of the four quarterly P&E reports were not supported by the County's records and contained the following errors: The 2024 Quarter 1 P&E report period and cumulative expenditures were each overstated by $333,424. The 2024 Quarter 2 P&E report period and cumulative expenditures were understated by $842,954 and $509,530, respectively. The 2024 Quarter 3 P&E report period and cumulative expenditures were understated by $239,925 and $749,455, respectively. Additionally, the current period obligations and cumulative obligations amounts reported in all quarterly reports could not be verified as supporting documentation was not provided for audit. The lack of internal controls and noncompliance was a systemic issue 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). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13 states in part: ". . . 13. 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 or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds, . . ." Cause All quarterly P&E reports were prepared and submitted by a consultant without an oversight or review process in place to prevent, or detect and correct, errors prior to submission. Effect Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment or loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management establish a proper system of internal controls that would ensure compliance with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Finding Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Contact Person Responsible for Corrective Action: Burzynski Thaddeus Contact Phone Number and Email Address: 219-755-3200, burzytx@lakecountyin.org Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: The County will develop and implement a proper system of internal controls and segregation of duties. This will ensure accuracy and correctness of all quarterly P & E Reports in the future. Anticipated Completion Date: December 2026
2023-005
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 16, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 16, 2026 (26 days from today).
What is a management decision? →FINDING 2023-002 Subject: CDBG - Entitlement Grants Cluster - Program Income Federal Agency: Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-11-UN-18-0002, B-19-UC-18-0016, B-20-UC-18-0016, B-21-UC-18-0016, B-22-UC-18-0016, B-23-UC-18-0016 Compliance Requirement: Program Income Audit Findings: Material Weakness, Modified Opinion This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context The County received program income through various loan programs it offered to qualifying individuals. Once the County received a loan payment, the receipt was posted into the financial accounting system of the County and recorded in a grant fund. The amount received was also to be recorded in the Department of Housing and Urban Development's (HUD) Integrated Disbursement and Information System (IDIS) website. The recorded program income in the IDIS website would then appear on the Drawdown Report by Voucher Number report (PR07). One individual was responsible for notifying the County Auditor's office when program income money was received so it could be receipted in the County's financial accounting system. The same individual was also responsible for reporting the information on the IDIS site. No internal controls were established to ensure the program income that was recorded in the financial accounting system was also reported on the IDIS site and the PR07 report. There were 5 out of 38 receipts that were unable to be located on the PR07 report provided for audit. In addition, we were unable to verify the total amount recorded in the receipt ledger to the total reported on the PR07 report. The County's ledger amount was greater than the PR07 report by $54,727 and is primarily attributed to under reporting of program income in the IDIS as identified above. 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: INDIANA STATE BOARD OF ACCOUNTS 20 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 200.1 states in part: ". . . Internal controls for non-Federal entities means: (1) Processes designed and implemented by non-Federal entities to provide reasonable assurance regarding the achievement of objectives in the following categories: (i) Effectiveness and efficiency of operations; (ii) Reliability of reporting for internal and external use; . . ." 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: . . . (3) Records that identify adequately the source and application of funds for federally funded 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. . . ." 24 CFR 570.504 states in part: "(a) Recording program income. The receipt and expenditure of program income as defined in § 570.500(a) shall be recorded as part of the financial transactions of the grant program. (b) Disposition of program income received by recipients. (1) Program income received before grant closeout may be retained by the recipient if the income is treated as additional CDBG funds subject to all applicable requirements governing the use of CDBG funds. (2) If the recipient chooses to retain program income, that program income shall be disposed of as follows: INDIANA STATE BOARD OF ACCOUNTS 21 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Program income in the form of repayments to, or interest earned on, a revolving fund as defined in § 570.500(b) shall be substantially disbursed from the fund before additional cash withdrawals are made from the U.S. Treasury for the same activity. (This rule does not prevent a lump sum disbursement to finance the rehabilitation of privately owned properties as provided for in § 570.513.) (ii) Substantially all other program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U.S. Treasury. . . ." Cause A turnover of staff in the County's Community Development office and management not ensuring that a system of internal controls that segregated key functions was designed, implemented, and operating effectively contributed to the program income issue identified above. Effect Without the proper implementation of an effectively designed system of internal controls, the County could not ensure that program income was properly reported and used before the drawdown of federal funds as required. The County could be at risk of losing federal funds by the federal awarding agency due to noncompliance with federal regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the County establish a system of internal controls to ensure that all program income received is properly reported in the IDIS system and expended prior to drawing down federal awards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Finding Subject: CDBG - Entitlement Grants Cluster - Program Income Contact Person Responsible for Corrective Action: Timothy A. Brown Contact Phone Number and Email Address: 219-755-3225 brownta@lakecountyin.org Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: This same finding was part of the 2022 audit in Finding 2022-003. The department was aware that this same finding would be arising in the 2023 audit again due to multiple year errors of previous staff. The corrective action plan proposed and adopted as part of the Corrective Action Plan for finding 2022-003 is still in force and is working to eliminate such findings in the future. The Lake County Redevelopment Commission adopted Resolution 001-2025 on January 16th, 2025 amending the Policy and Procedures Manual of the Department concerning Program Income (PI) internal controls for proper reporting in the IDIS system to address and correct the finding going forward. Anticipated Completion Date: Done
2022-003
FINDING 2023-003 Subject: COVID-19 - Emergency Rental Assistance Program - Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Emergency Rental Assistance Program Assistance Listings Number: 21.023 Federal Award Number and Year (or Other Identifying Number): ERA-0359 Compliance Requirement: Period of Performance Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 22 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County received a federal Emergency Rental Assistance (ERA) Program grant, that was created during the COVID-19 pandemic, to help provide financial and housing stability assistance to eligible households to help prevent eviction and ensure stable housing. Recipients had a period of performance to incur costs that was between the start of the grant until September 30, 2022, for the Emergency Rental Assistance Program 1 (ERA1) and could be extended until December 29, 2022, if the recipient received reallocated funds from the Department of the Treasury. The County did receive reallocated funds from the Department of the Treasury; therefore, the County had until December 29, 2022, to incur costs for the ERA1 program. The costs that were incurred during the period of performance then had a liquation date of April 28, 2023. The County did not have internal controls in place to ensure costs were incurred within the grant period of performance and those costs incurred were properly paid by the liquidation date. Five out of seven of the expenditures tested, totaling $124,787, were for costs incurred after the period of performance. One expenditure included a December obligation to a subrecipient of $31,026, which was within the period of performance. But, the County did not pay the subrecipient by the liquidation date, so a total of $155,813 was paid after the liquidation date. 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3)." Cause Due to turnover in the Economic Development Department and lack of knowledge of the period of performance dates of the ERA1 program, noncompliance went undetected by the County. Effect Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award resulted in the request by the Department of the Treasury for the County to refund $154,945. INDIANA STATE BOARD OF ACCOUNTS 23 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs We identified $155,813 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the County establish a system of internal controls to ensure compliance with period of performance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Finding Subject: COVID-19 Emergency Rental Assistance Program - Period of Performance Contact Person Responsible for Corrective Action: Timothy A. Brown Contact Phone Number and Email Address: 219-755-3225 brownta@lakecountyin.org Views of Responsible Officials: We concur with the finding with reservations on a portion of the Finding. Description of Corrective Action Plan: \ This program is completed and the period of performance is over therefore there is not a need to formally adopt any Corrective Action Plan. The Subrecipient Contractor that administered the program has agreed that this finding was due to their internal error in submitting administration invoices too late to be properly processed and approved by the County. They will be reimbursing the ERA1 fund for the error in the amount of $154,812.56 that will be sent back to the US Treasury. Reservation: The US Treasury required the local grant recipient to prosecute ERA1 fraud activities. There were two fraud cases that were prosecuted by our local attorney. His fees were then deducted from the ERA1 fund as administration costs. The grant recipient should not be penalized for doing as directed to prosecute fraud cases without being able to pay for the services rendered. We do not control the timelines of the local courts nor the responses/actions of the defendants delaying the actions beyond the Period of Performance. Anticipated Completion Date: None, no corrective action plan is necessary.
FINDING 2023-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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 Numbers and Years (or Other Identifying Numbers): Contract #65873, SLT-3157 Pass-Through Entity: Indiana Department of Natural Resources Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement The County did adopt an applicable federal purchasing policy. The Lake County Indiana Purchasing Manual for Supplies, Services and Public Works states on page 19 that "Federal funds more than $50,000 but less than $150,000 will invite 3 quotes at an open public meeting . . .", which is the federal requirement for small purchases. However, the County did not follow this policy. In 2023, the County had one vendor that was paid a total of $97,525 from COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) under Contract #65873 from the Indiana Department of Natural Resources. However, the County did not obtain price or rate quotes for the one applicable vendor under the small purchase threshold as required. Suspension and Debarment Prior to entering into subawards and covered transactions with the SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. INDIANA STATE BOARD OF ACCOUNTS 24 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County did not have policies or procedures in place related to the suspension and debarment requirements for the SLFRF funds. Two covered transactions totaling $1,990,616 paid from SLFRF funds were identified. Documentation to show that suspension and debarment was verified prior to entering into contracts with these two vendors could not be provided by the County. The amounts for which suspension and debarment were not verified for Contract #65873 from the Indiana Department of Natural Resources and the SLT-3157 directly from the Department of the Treasury were $176,711 and $1,813,905, respectively. The lack of internal controls and noncompliance were isolated to the transactions identified above. 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 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or subaward. (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 25 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The County's purchasing policy does not provide procedures on how the County will ensure the appropriate number of quotes will be obtained for small purchases or how the County will ensure compliance with the suspension and debarment requirements. Effect Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment or loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation Management of the County should develop procedures to ensure the appropriate procurement methods are used for items or services procured that are within the small purchase threshold and to ensure vendors are not suspended or debarred when expending federal funds. Appropriate documentation should be maintained to ensure compliance with procurement and suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Contact Person Responsible for Corrective Action: Craig Zandstra Contact Phone Number: 219-945-0543 Ext 234 Contact Email: craigz@lakecountyparks.com Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan As this finding is shared between The Lake County Board of Commissioners and the Lake County Parks & Recreation Department, both departments will develop procedures to ensure the appropriate procurement methods are used for vendors that are within the Small Purchase Threshold. Both departments will also ensure that vendors are not suspended or debarred when expanding federal funds. Lastly, appropriate documentation will be maintained to ensure compliance with procurement, suspension and debarment in the future. Completion Date: June 2026
FINDING 2023-005 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): SLT-3157 Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 26 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Recipients are required to submit quarterly Project and Expenditures (P&E) reports to the U.S. Department of the 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 above 250,000 residents. As such, the County was required to submit quarterly P&E reports in 2023. The County did not have internal control procedures in place over the quarterly P&E reports. The quarterly P&E reports were generated by one individual without a review or oversight process to detect and correct errors prior to submission. 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). . . ." 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 over reporting, the County cannot ensure that the quarterly P&E reports submitted were materially accurate and correct. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment or loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the County design and implement a proper system of internal controls to ensure the accuracy and correctness of the quarterly 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.
FINDING 2023-005 Contact Person Responsible for Corrective Action: Craig Zandstra Contact Phone Number: 219-945-0543 Ext 234 Contact Email: craigz@lakecountyparks.com Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan As this finding is shared between The Lake County Board of Commissioners and the Lake County Parks & Recreation Department, both departments will develop and implement a proper system of internal controls and segregation of duties. This will ensure accuracy and correctness of all quarterly P & E Reports in the future. Completion Date: June 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on November 6, 2024. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by May 6, 2025, which was (472 days ago).
What is a management decision? →FINDING 2022-003 Subject: CDBG - Entitlement Grants Cluster - Program Income Federal Agency: Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-11-UN-18-0002, B-17-UC-18-0016, B-18-UC-18-0016, B-19-UC-18-0016, B-20-UC-18-0016, B-21-UC-18-0016 Compliance Requirement: Program Income Audit Findings: Material Weakness, Modified Opinion Condition and Context The County received program income through various loan programs it offered to qualifying individuals. Once the County received a loan payment, the receipt was posted into the financial accounting system of the County and recorded in a grant fund. The amount received was also to be recorded in the Department of Housing and Urban Development's (HUD) Integrated Disbursement and Information System (IDIS) website. The recorded program income in the IDIS would then appear on the Drawdown Report by Voucher Number report (PR07). One individual was responsible for notifying the County Auditor's office when program income money was received, so it could be receipted in the County's financial accounting system. The same individual was also responsible for reporting the information on the IDIS site. No internal controls were established to ensure the program income that was recorded in the financial accounting system was also reported on the IDIS site and the PR07 report. Four receipts totaling $38,960 were selected for testing from the County's receipt ledger. The four receipts were unable to be located on the PR07 report provided for audit. However, one of the four receipts was recorded in the IDIS system after information regarding the receipt was requested. In addition, we were unable to verify the total amount recorded in the receipt ledger to the total reported on the PR07 report. The County's ledger was greater than the PR07 report by $30,324 and is primarily attributed to under reporting of program income in the IDIS as identified above. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 21 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.1 states in part: ". . . Internal controls for non-Federal entities means: (1) Processes designed and implemented by non-Federal entities to provide reasonable assurance regarding the achievement of objectives in the following categories: (i) Effectiveness and efficiency of operations; (ii) Reliability of reporting for internal and external use; . . ." 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: . . . (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. . . ." 24 CFR 570.504 states in part: "(a) Recording program income. The receipt and expenditure of program income as defined in § 570.500(a) shall be recorded as part of the financial transactions of the grant program. (b) Disposition of program income received by recipients. (1) Program income received before grant closeout may be retained by the recipient if the income is treated as additional CDBG funds subject to all applicable requirements governing the use of CDBG funds. (2) If the recipient chooses to retain program income, that program income shall be disposed of as follows: (i) Program income in the form of repayments to, or interest earned on, a revolving fund as defined in § 570.500(b) shall be substantially disbursed from the fund before additional cash withdrawals are made from the U.S. Treasury for the same activity. (This rule does not prevent a lump sum disbursement to finance the rehabilitation of privately owned properties as provided for in § 570.513.) (ii) Substantially all other program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U.S. Treasury. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A turnover of staff in the County's Community Development office, and management not ensuring that a system of internal controls that segregated key functions was designed, implemented, and operating effectively, contributed to the program income issue identified above. Effect Without the proper implementation of an effectively designed system of internal controls, the County could not ensure that program income was properly reported and used before the drawdown of federal funds as required. The County could be at risk of losing federal funds by the federal awarding agency due to noncompliance with federal regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the County establish a system of internal controls to ensure that all program income received is properly reported in the IDIS system and expended prior to drawing down federal awards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Finding Subject: CDBG – Entitlement Grants Cluster—Program Income Summary of Finding: Condition and Context: The County received program income through various loan programs it offered to qualifying individuals. Once the County received a loan payment, the receipt was posted into the financial accounting system of the County and recorded in a grant fund. The amount received was also to be recorded in the Department of Housing and Urban Development’s (HUD) Integrated Disbursement & Information System (IDIS) website. The recorded program income in IDIS would then appear on the Drawdown Report by Voucher Number report (PR07). No internal control process had been established over the program income compliance requirement. One individual was responsible for notifying the Auditor's office when program income money was received, in order for it to be receipted in the County’s financial accounting system. The same individual was also responsible for reporting the same on IDIS site. No controls were established to ensure the program income that was recorded in the financial accounting system was also reported on IDIS site and the PR07 report. Additionally, four receipts totaling $38,960 were selected for testing from the County’s receipt ledger. These four receipts were unable to be located on the PR07 report provided for audit. One of the four receipts was recorded in the IDIS system after information regarding the receipt was requested. The receipt was not in the PR07 report that had been provided for audit when we were provided information documenting it being recorded in IDIS. Furthermore, we were unable to verify the total amount recorded in receipt ledger to the total reported on PR07 report. The County’s ledger was greater than the PR07 report by $30,324 and is primarily attributed to under reporting of program income in IDIS as identified above. Recommendation: We recommended that the management of the County establish a system of internal controls to ensure that all program income received is properly reported in the IDIS system and expended prior to drawing down federal awards. Contact Person Responsible for Corrective Action: Timothy A. Brown Contact Phone Number and Email Address: 219-755-3225 and brownta@lakecountyin.org Views of Responsible Officials: LCCEDD concurs with the audit finding. LAKE COUNTY COMMUNITY ECONOMIC DEVELOPMENT DEPARTMENT 2293 N. Main Street - Crown Point, In 46307 Tel. (219) 755-3225 www.lakecountyin.org INDIANA STATE BOARD OF ACCOUNTS 36 Description of Corrective Action Plan: LCCEDD staff have already adopted changes in internal controls to correct the Program Income reporting deficiencies. The process is as follows: 1. All incoming checks into the department are first reviewed by the Deputy Director. The Deputy Director determines the source of income (i.e. CDBG, HOME, NSP) and the correct receipt type (program income, repayment, homebuyer). The Deputy Director records the IDIS number of the project on the check before giving it to the Fiscal Officer. 2. The Fiscal Officer records the receipt on an internal schedule of receipts and submits the check to the County Auditor with the check deposit form with the IDIS number and correct fund and account number for deposit. 3. Once the County Auditor posts the receipt to the County’s general ledger, the Fiscal Officer records the Auditor’s receipt into HUD’s IDIS Online reporting system. 4. At the close of each quarter, the Fiscal Officer will prepare and submit the Cash on Hand Report within thirty days of the close of the quarter. The Fiscal Officer will reconcile all expenses and receipts posted in the County’s general ledger system with the receipts (report PR09) and drawdown requests (report PR07) in HUD’s IDIS Online reporting system. Before submitting the Cash on Hand Report in the IDIS Online system, the Deputy Director will review and approve the prepared reconciliation and Cash on Hand Report. Any discrepancies between the two systems will be reported to the Auditor and the Department Director to determine corrective actions. 5. Within 30 days of the close of each calendar quarter, the Fiscal Officer will submit the Cash on Hand Report via IDIS Online. The Fiscal Officer will maintain a copy of the Cash on Hand report and the corresponding reconciliation in their program files. 6. On an on-going basis, the Director will meet with Department staff to determine if training or technical assistance is needed to complete HUD reporting requirements in a timely and accurate manner. Anticipated Completion Date: A policy and procedure amendment will be written by the end of this year and presented to the Lake County Redevelopment Commission for their March 2025 meeting for adoption.
FINDING 2022-004 Subject: CDBG - Entitlement Grants Cluster - Reporting Federal Agency: Department of Housing and Urban Development Federal Programs: Community Development Block Grants/Entitlement Grants; COVID-19 - Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-11-UN-18-0002, B-17-UC-18-0016, B-18-UC-18-0016, B-19-UC-18-0016, B-20-UC-18-0016, B-21-UC-18-0016, B-20-UW-18-0016 Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context The County did not have internal control procedures over the Quarterly Reports (PR29), the IDIS Section 3 Performance Report, and the NSP Quarterly Reports. One individual prepared or generated the report without a review or oversight process. INDIANA STATE BOARD OF ACCOUNTS 23 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, the County's internal controls were not consistently documented over the drawdown requests for the CDBG grant during the audit period. The drawdown requests were entered into the IDIS, which then became the basis for several of the reports. The internal control presented by the County was that one individual prepared and entered the request, which would then be printed, and another individual would review and sign the printed request to document the review. Of the 13 reimbursement requests tested, internal control documentation for 8 of the requests was printed and signed during the current period, after the documentation was requested. The creation of documentation of the internal control procedure did not support that internal controls were properly implemented and effective during the audit period. The lack of internal controls 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 200.1 states in part: ". . . Internal controls for non-Federal entities means: (1) Processes designed and implemented by non-Federal entities to provide reasonable assurance regarding the achievement of objectives in the following categories: (i) Effectiveness and efficiency of operations; (ii) Reliability of reporting for internal and external use; . . ." Cause A turnover of staff in the County's Community Development office, and management not ensuring that a system of internal controls that segregated key functions was designed, implemented, and operating effectively, contributed to the program income issue identified above. 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, material noncompliance. 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. INDIANA STATE BOARD OF ACCOUNTS 24 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management design and implement a proper system of internal controls, and retain documentation of its system of internal controls, to ensure compliance with reporting requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Finding Subject: CDBG – Entitlement Grants Cluster—Reporting Summary of Finding: Condition and Context: The County did not have internal control procedures over the Quarterly Reports (PR29), IDIS Section 3 Performance Report, and NSP Quarterly Reports. One individual prepared or generated the report without a review or oversight process. Additionally, the County’s internal controls were not consistently documented over the draw down requests for the CDBG grant during the audit period. The draw down requests were entered into IDIS, which then becomes the basis for several of the reports. The control presented by the County was that one individual prepared and entered the request, which would then be printed, and another individual would review and sign the printed request to document the review. Of the thirteen reimbursement requests tested, control documentation for eight of the requests were printed and signed during current period, after the documentation was requested. The creation of documentation of the control procedure did not support that internal controls were effective during the audit period. Recommendation: We recommended that the County's management design and implement a proper system of internal controls, and retain documentation of its system of internal controls, to ensure compliance with reporting requirements. Contact Person Responsible for Corrective Action: Timothy A. Brown Contact Phone Number and Email Address: 219-755-3225 and brownta@lakecountyin.org Views of Responsible Officials: LCCEDD concurs with the audit finding. Concurrence: The Fiscal Officer from the Audit Period was new to the position and her training was focused on the changes to the financial systems at the county over the DRGR quarterly reporting of NSP actions. Further, Finding 2022-003 also caused some of the reporting issues with CDBG of having two CDBG funds and posting errors to these funds. The current LCCEDD Fiscal Officer found the problems during the audit and corrective actions were done retroactively to address this part of the finding with the drawdown requests. The CDBG drawdowns were submitted into IDIS by the Fiscal Officer who printed out the drawdown request. These printouts were then given to the Executive Director or the Deputy Director who then went into IDIS and approved the drawdown request, then print out the IDIS drawdown approval and return the request and the signed approval back to the Fiscal Officer. LAKE COUNTY COMMUNITY ECONOMIC DEVELOPMENT DEPARTMENT 2293 N. Main Street - Crown Point, In 46307 Tel. (219) 755-3225 www.lakecountyin.org INDIANA STATE BOARD OF ACCOUNTS 38 Description of Corrective Action Plan: LCCEDD staff have already adopted changes in internal controls to correct the CDBG reporting deficiencies as described in Finding 2022-003. Further, management will oversee compliance with current policies and the new quarterly reconciliations. LCCEDD policies will be updated to make the following changes: General Management and Oversight: On an on-going basis, the Director will meet with Department staff to determine if training or technical assistance is needed to complete HUD reporting requirements in a timely and accurate manner. NSP Quarterly Reports: To be followed until the HUD field office indicates QPR reports are no longer needed due to grant closeout: 1. Before the close of each month, the Fiscal Officer will create receipts and draws as needed in HUD’s DRGR system to reflect funds receipted or expended by the County. 2. At the close of each quarter, the Fiscal Officer will prepare and submit the quarterly report in DRGR for the NSP1 and NSP3 grant allocation. To prepare the report, the Fiscal Officer will reconcile all expenses and receipts posted in the County’s general ledger system for the NSP programs with the receipts and drawdown requests recorded in in HUD’s DRGR reporting system. 3. Before submitting the NSP QPR Report in the DRGR system, the Deputy Director will review and approve the prepared reconciliation and QPR Report. Any discrepancies between the two systems will be reported to the Auditor and the Department Director to determine corrective actions. 4. Within 30 days of the close of each calendar quarter, the Fiscal Officer will submit the NSP QPR Report via DRGR. The Fiscal Officer will maintain a copy of the NSP QPR and the corresponding reconciliation in their program files. Cash on Hand Reports: 1. At the close of each quarter, the Fiscal Officer will prepare and submit the Cash on Hand Report within thirty days of the close of the quarter. The Fiscal Officer will reconcile all expenses and receipts posted in the County’s general ledger system with the receipts (report PR09) and drawdown requests (report PR07) in HUD’s IDIS Online reporting system. 2. Before submitting the Cash on Hand Report in the IDIS Online system, the Deputy Director will review and approve the prepared reconciliation and Cash on Hand Report. Any discrepancies between the two systems will be reported to the Auditor and the Department Director to determine corrective actions. 3. Within 30 days of the close of each calendar quarter, the Fiscal Officer will submit the Cash on Hand Report via IDIS Online. The Fiscal Officer will maintain a copy of the Cash on Hand report and the corresponding reconciliation in their program files. INDIANA STATE BOARD OF ACCOUNTS 39 Section 3 Reporting: 1. As part of the application review, the Deputy Director will determine the applicability of the Section 3 requirements for each proposed project. 2. For projects where Section 3 is applicable, the Deputy Director will ensure that staff administering the project are familiar with the Section 3 requirements and understand the forms and reporting required to properly report Section 3, including the determination of total labor hours worked, labors hours worked by Section 3 and Targeted Section 3 workers, and corresponding certifications. 3. The County will collect Section 3 reports from subrecipients administering projects throughout the period of performance. If the project meets Section 3 benchmarks, the County will consider the activity to be in full compliance with Section 3. If the project does not meet one of the Section 3 benchmarks, the County will require reporting on the qualitative efforts that the subrecipient made to try to reach the benchmarks. 4. Section 3 information collected for each project will be reported in IDIS Online. The Section 3 information must be reported annually before the submission of the annual report (CAPER) to HUD. Anticipated Completion Date: Part of the corrections have already been put into place and the Policy and Procedure Manual will be amended in April of 2025 after the Lake County Redevelopment Commission adopts appropriate changes.
FINDING 2022-005 Subject: CDBG - Entitlement Grants Cluster - Period of Performance Federal Agency: Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-11-UN-18-0002, B-17-UC-18-0016, B-18-UC-18-0016, B-19-UC-18-0016, B-20-UC-18-0016, B-21-UC-18-0016 Compliance Requirement: Period of Performance Audit Finding: Material Weakness Condition and Context The County did not have internal control procedures over adjustments to Community Development Block Grants/Entitlement Grants funds. During and after the transition to a new financial accounting software system for the County, various adjusting entries were entered by outside consultants without any oversight or review by County management. The lack of internal controls was a systematic issue from July 1, 2022 to December 31, 2022. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 25 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.1 states in part: ". . . Internal controls for non-Federal entities means: (1) Processes designed and implemented by non-Federal entities to provide reasonable assurance regarding the achievement of objectives in the following categories: (i) Effectiveness and efficiency of operations; (ii) Reliability of reporting for internal and external use; . . ." Cause The conversion process due to the change in financial software in the middle of year 2022 caused abnormal activity which was not a part of the system of internal controls as designed and implemented by the County. 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, material noncompliance. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management design and implement a proper system of internal controls, and retain documentation of its system of internal controls, to ensure compliance with period of performance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005 Finding Subject: CDBG ‐ Entitlement Grants Cluster ‐ Period of Performance Summary of Finding: The county did not have properly designed internal controls in order to prevent or detect errors in the general ledger for activities related to adjustments to Community Development Block Grant funds during the transition and implementation of the Oracle accounting system. Contact Person Responsible for Corrective Action: Dan Ciecierski, Comptroller Contact Phone Number and Email Address: 219-755-3137 | ciecidx@lakecountyin.org Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: N/A Description of Corrective Action Plan: Lake County has begun execution of a comprehensive strategy in order to address the lack of internal controls around its financial transactions and reporting in a number of ways. The following will address control issues identified in these areas: - Financial Transactions and Reporting - Employee Benefit Accrual (EBA) Fund - Cash and Investments - Receipts - Journal Entries - Financial Statement & Reporting First, a more qualified consulting firm has been hired to assist on two important fronts related to the new accounting system: 1. The first is the reimplementation of the Oracle accounting software which is inclusive of correcting data and poor configurations from the prior consultant, and deploying additional appropriate functionality to allow the County to optimize Oracle to suit the accounting needs from a process standpoint as well as an internal control perspective. Oracle in and of itself allows the county to implement strategic preventative internal controls via role-based access features. Said differently, Oracle has a more robust and granular ability to automatically create separation of INDIANA STATE BOARD OF ACCOUNTS 41 duties among employees and departments simply by restricting the ability to perform actions which should be naturally segregated to mitigate risk of error. 2. Secondly, the managed services portion of the consulting contract will aid the County in running the business activities related to both the Oracle Human Capital Management (HCM) module and the Enterprise Resource Planning (ERP) module (Purchasing, Accounts Receivable, Accounts Payable, and General Accounting). Another initiative being executed to address the lack of internal controls is to attract, and hire qualified professionals who have years of real world, practical experience in the field for which a job relates to. During the original implementation of the Oracle system there was no one who fully understood, nor had a background in the professional field of accounting in the Auditor’s Office. The County has hired a Comptroller who passed the CPA, and has spent their entire career in the field of accounting. This individual has worked in the corporate utility and banking industries and has experience in GAAP reporting, regulatory reporting, internal controls, and overall general accounting. Additionally, the Comptroller has been involved with internal and external audit compliance as well as the installation, user acceptance testing, and transition of new accounting software. In order to mitigate the risk of error for any adjusting entries made which are recommended by consultants, the Comptroller of Finance must review and approve these entries. Anticipated Completion Date: 1. This process has already been put into place and is being executed.
FINDING 2022-006 Subject: COVID-19 - Emergency Rental Assistance Program - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Emergency Rental Assistance Program Assistance Listings Number: 21.023 Federal Award Numbers and Years (or Other Identifying Numbers): ERA-0359, ERA2-0357 Compliance Requirement: Reporting Audit Findings: Significant Deficiency, Other Matters INDIANA STATE BOARD OF ACCOUNTS 26 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Recipients are required to submit FFATA (Federal Funding Accountability and Transparency Act) reporting through the FSRS (FFATA Subaward Reporting System) website to the U.S. General Services Administration. This reporting is required to be completed for each action based on subawards of $30,000 or more that are made from the federal program. Information to be reported included the information contained within the subaward. The County did not have any policies or procedures in place related to the FFATA reporting requirements. During the audit period, the County was required to submit the FFATA reporting for one subaward that was over $30,000. The County, however, did not submit the required report on the FSRS website. The lack of internal controls and noncompliance were isolated to the FFATA reporting in 2022. 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 170 Appendix A(I)(a) states in part: ". . . you must report each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency . . ." Cause A system of internal controls over the FFATA reporting was not designed by management of the County to ensure the County provided the U.S. General Services Administration, as well as users of the FSRS website, with complete and accurate information related to the COVID-19 - Emergency Rental Assistance Program awards. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure compliance with FFATA reporting requirements. 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. Additionally, the County not meeting the COVID-19 - Emergency Rental Assistance Program reporting requirements increases the likelihood that the U.S. General Services Administration, as well as users of the FSRS website, will not have access to transparent and accurate information regarding subawards of federal awards. INDIANA STATE BOARD OF ACCOUNTS 27 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls to ensure that all subrecipients awarded $30,000 or more are properly reported in accordance with the FFATA reporting requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Finding Subject: Emergency Rental Assistance Program -- Reporting Summary of Finding: Condition and Context: Recipients are required to submit FFATA (Federal Funding Accountability and Transparency Act) reporting through the FSRS (FFATA Subaward Reporting System) website to the U.S. General Services Administration. This reporting is required to be completed for each action based on subawards of $30,000 or more that are made from the federal program. Information to be reported included the information contained within the subaward. The County did not have any policies or procedures in place related to the FFATA reporting requirements. During the audit period, the County was required to submit the FFATA reporting for one subaward that was over $30,000. The County, however, did not submit the required report on the FSRS website. Recommendation: We recommended that management of the County design and implement a proper system of internal controls, to ensure that all subrecipients awarded $30,000 or more are properly reported in accordance with FFATA reporting requirements. Contact Person Responsible for Corrective Action: Timothy A. Brown Contact Phone Number and Email Address: 219-755-3225 and brownta@lakecountyin.org Views of Responsible Officials: LCCEDD concurs with the audit finding. Description of Corrective Action Plan: LCCEDD staff will be preparing an amendment to the policy and procedures manual to follow the FFATA regulations for all of the department sub-recipients (social service agencies) including the CDBG partner communities. The process will include review of all sub-recipient agreements by the Deputy Director who will provide to the Fiscal Officer a copy of the approved and signed agreement. The Fiscal Officer will work with the Bookkeeper to record the agreements into the FFATA Subaward Reporting System (FSRS). LAKE COUNTY COMMUNITY ECONOMIC DEVELOPMENT DEPARTMENT 2293 N. Main Street - Crown Point, In 46307 Tel. (219) 755-3225 www.lakecountyin.org INDIANA STATE BOARD OF ACCOUNTS 43 Anticipated Completion Date: A policy and procedure amendment will be written by the end of this year and presented to the Lake County Redevelopment Commission for their January 2025 meeting for adoption. LCCEDD staff will start reporting into FSRS all sub-recipient for FY2023 and FY2024 once the policy and procedure amendments are approved.
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on October 22, 2018. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by April 22, 2019, which was (2678 days ago).
What is a management decision? →GSA_MIGRATION
GSA_MIGRATION
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on January 10, 2018. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by July 10, 2018, which was (2964 days ago).
What is a management decision? →GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
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