Madison County Indiana

FINDING 2019-002 Subject: WIOA Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Labor Federal Programs: WIOA Adult Program, WIOA Youth Activities, WIOA Dislocated Worker Formula Grants CFDA Numbers: 17.258, 17.259, 17.278 Federal Award Numbers and Years (or Other Identifying Numbers): PY15-CR-01-IA, PY18-CR-01-IA Pass-Through Entity: Interlocal Association Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the County to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. There were no internal controls in place over the disbursement of funds for the employers' share of retiree health insurance. The lack of internal controls was isolated to the retiree medical insurance benefit disbursements and indirect costs charged to the program as detailed in Finding 2019-003. 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 The County's management had not developed a system of internal controls to ensure compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective internal control system placed the County at risk of noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management establish a system of internal controls to ensure compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2019-002 (Auditor Assigned Reference Number) Contact Person Responsible for Corrective Action: Madison County Commissioners Contact Phone Number: 765-641-9470 Views of Responsible Official: The Madison County Commissioners do not have reason to dispute the finding as JobSource is no longer administering the WIOA Grants for Madison County. Accordingly, the Madison County Commissioners, as indicated below, were unable in 2019 to implement corrective action plans from 2018, and are not otherwise able to comment on the auditor?s findings. Description of Corrective Action Plan: Madison County no longer administers the WIOA Grants through JobSource. These are now administered through Interlocal Assistance, which is based in Greenfield. In 2019, after several negative audit findings and other concerns about management and operations, the Madison County Commissioners chose to change course with respect to the Executive Director of JobSource. In early 2019, the new Director was put in and began evaluating management issues and audit concerns. This was part of the 2018 corrective action plan. Unfortunately, Region 5, which administers the grants, chose to terminate its contract with JobSource for political and other reasons. This resulted in Interlocal Assistance out of Greenfield now administering the grants. The Madison County Commissioners find this to be of potential concern, but do not believe any corrective action plan will be needed since Madison County no longer administers the grants and won?t at the time of the 2020 audit. Anticipated Completion Date: Immediately

FINDING 2019-003 Subject: WIOA Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles - Cost Allocation Plan Federal Agency: Department of Labor Federal Programs: WIOA Adult Program, WIOA Youth Activities, WIOA Dislocated Worker Formula Grants CFDA Numbers: 17.258, 17.259, 17.278 Federal Award Numbers and Years (or Other Identifying Numbers): PY15-CR-01-IA, PY18-CR-01-IA Pass-Through Entity: Interlocal Association Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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 2018-004. Condition and Context An effective internal control system was not in place at JobSource, a fiscal department of the County, to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. There were no internal controls in place to ensure that reimbursement for indirect costs charged to the program were properly requested. JobSource was required to have an approved Cost Allocation Plan (CAP) to request reimbursement for indirect costs. JobSource did create a CAP, but it did not include many specific details required by 2 CFR 200 Appendix V Section E. Because the County did not have a proper CAP, all indirect costs claimed for reimbursement are considered questioned costs. The lack of internal controls over indirect costs and the lack of an appropriately documented CAP 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 Appendix V Part D(3) states: "All other local governments claiming central service costs must develop a plan in accordance with the requirements described in this Part and maintain the plan and related supporting documentation for audit. These local governments are not required to submit their plans for Federal approval unless they are specifically requested to do so by the cognizant agency for indirect costs. Where a local government only receives funds as a subrecipient, the passthrough agency will be responsible for monitoring the subrecipients plan." 2 CFR 200 Appendix V Part E(1) states: "All proposed plans must be accompanied by the following: an organization chart sufficiently detailed to show operations including the central service activities of the state/local government whether or not they are shown as benefitting from central service functions; a copy of the Comprehensive Annual Financial Report (or a copy of the Executive Budget if budgeted costs are being proposed) to support the allowable costs of each central service activity included in the plan; and, a certification (see subsection 4.) that the plan was prepared in accordance with this Part, contains only allowable costs, and was prepared in a manner that treated similar costs consistently among the various Federal awards and between Federal and non-Federal awards/activities." Cause Management of the County had not designed or implemented internal control procedures that would have ensured that adequate documentation of the Cost Allocation Plan was maintained in compliance with the requirements listed above. Effect The failure to retain or provide appropriate supporting documentation for the Cost Allocation Plan prevented the determination of the County's compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Questioned Costs Known questioned costs of $253,535 are detailed in the Condition and Context. Recommendation We recommended that the County's management establish internal controls and ensure that documentation will be maintained and made available for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2019-003 (Auditor Assigned Reference Number) Contact Person Responsible for Corrective Action: Madison County Commissioners Contact Phone Number: 765-641-9470 Views of Responsible Official: The Madison County Commissioners do not have reason to dispute the finding as JobSource is no longer administering the WIOA Grants for Madison County. Accordingly, the Madison County Commissioners, as indicated below, were unable in 2019 to implement corrective action plans from 2018, and are not otherwise able to comment on the auditor?s findings. Description of Corrective Action Plan: Madison County no longer administers the WIOA Grants through JobSource. These are now administered through Interlocal Assistance, which is based in Greenfield. In 2019, after several negative audit findings and other concerns about management and operations, the Madison County Commissioners chose to change course with respect to the Executive Director of JobSource. In early 2019, the new Director was put in and began evaluating management issues and audit concerns. This was part of the 2018 corrective action plan. Unfortunately, Region 5, which administers the grants, chose to terminate its contract with JobSource for political and other reasons. This resulted in Interlocal Assistance out of Greenfield now administering the grants. The Madison County Commissioners find this to be of potential concern, but do not believe any corrective action plan will be needed since Madison County no longer administers the grants and won?t at the time of the 2020 audit. Anticipated Completion Date: Immediately

2018-004

GSA_MIGRATION

GSA_MIGRATION

2017-004

GSA_MIGRATION

GSA_MIGRATION

2016-004

GSA_MIGRATION

GSA_MIGRATION

2016-009

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION