EIN: 356001129
UEI: GSA_MIGRATION
Audited by: INDIANA STATE BOARD OF ACCOUNTS
Oversight agency: 66 [Environmental Protection Agency]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 26, 2022. 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 June 26, 2023 (1160 days ago).
What is a management decision? →FAC accepted this audit on September 24, 2020 — management decision was due March 24, 2021.
FINDING 2019-003 Subject: Water and Waste Disposal Systems for Rural Communities - Internal Controls Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities CFDA Number: 10.760 Federal Award Numbers and Years (or Other Identifying Numbers): 92-01, 00-02, 92-03, 00-04, 92-05 Compliance Requirements: Procurement and Suspension and Debarment, Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF NAPPANEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding related to suspension and debarment from the immediately prior audit report. The prior audit finding number was 2018-003. Condition and Context An effective internal control system was not in place at the City in order to ensure compliance with requirements related to the grant agreement and the Reporting and Procurement and Suspension and Debarment compliance requirements. Suspension and Debarment The City relied on the contracted engineer to ensure that suspension and debarment requirements were met without an oversight or approval process. Reporting The City relied on an accounting firm to ensure that reporting requirements were met without an oversight or approval process. The lack of internal controls was a systemic issue, which occurred 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). . . ." Cause The City's management had not implemented a system of internal controls to ensure compliance with the grant agreement and the Reporting and Procurement and Suspension and Debarment compliance requirements. Effect The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the compliance requirements listed above. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the program, which could have resulted in the loss of federal funds to the City. INDIANA STATE BOARD OF ACCOUNTS 17 CITY OF NAPPANEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a system of internal controls, including segregation of duties, related to the grant agreement and compliance requirements listed above. An internal control system, including segregation of duties, should be designed and operate effectively to provide reasonable assurance that material noncompliance with the grant agreement or a compliance requirement of a federal program will be prevented, or detected and corrected, on a timely basis. In order to have an effective internal control system, it is important to have proper segregation of duties. This is accomplished by making sure proper oversight, reviews, and approvals take place and to have a separation of functions over certain activities related to the program. The fundamental premise of segregation of duties is that an individual or small group of individuals should not be in a position to initiate, approve, undertake, and review the same activity. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Show full finding ▾Hide full finding ▴FINDING 2019-003 Subject: Water and Waste Disposal Systems for Rural Communities - Internal Controls Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities CFDA Number: 10.760 Federal Award Numbers and Years (or Other Identifying Numbers): 92-01, 00-02, 92-03, 00-04, 92-05 Compliance Requirements: Procurement and Suspension and Debarment, Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF NAPPANEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding related to suspension and debarment from the immediately prior audit report. The prior audit finding number was 2018-003. Condition and Context An effective internal control system was not in place at the City in order to ensure compliance with requirements related to the grant agreement and the Reporting and Procurement and Suspension and Debarment compliance requirements. Suspension and Debarment The City relied on the contracted engineer to ensure that suspension and debarment requirements were met without an oversight or approval process. Reporting The City relied on an accounting firm to ensure that reporting requirements were met without an oversight or approval process. The lack of internal controls was a systemic issue, which occurred 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). . . ." Cause The City's management had not implemented a system of internal controls to ensure compliance with the grant agreement and the Reporting and Procurement and Suspension and Debarment compliance requirements. Effect The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the compliance requirements listed above. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the program, which could have resulted in the loss of federal funds to the City. INDIANA STATE BOARD OF ACCOUNTS 17 CITY OF NAPPANEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a system of internal controls, including segregation of duties, related to the grant agreement and compliance requirements listed above. An internal control system, including segregation of duties, should be designed and operate effectively to provide reasonable assurance that material noncompliance with the grant agreement or a compliance requirement of a federal program will be prevented, or detected and corrected, on a timely basis. In order to have an effective internal control system, it is important to have proper segregation of duties. This is accomplished by making sure proper oversight, reviews, and approvals take place and to have a separation of functions over certain activities related to the program. The fundamental premise of segregation of duties is that an individual or small group of individuals should not be in a position to initiate, approve, undertake, and review the same activity. 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 Contact Person Responsible for Corrective Action: Jeff Knight, Clerk-Treasurer Contact Phone Number: (574) 773-2112 Views of Responsible Official: I concur with the Audit findings. Description of Corrective Action Plan: There are two Internal Control issues that will be addressed. Firstly, in situations where the contracted engineer pulls the SAM reports, the Clerk-Treasurer will create a tracking spreadsheet that reflects who the vendors/contractors are and obtain copies of the SAM reports for the internal file. This will allow the Clerk-Treasurer to be able to sign-off that the Suspension and Debarment requirements have been addressed. Also, the Clerk-Treasurer has registered the City so that SAM reports may be obtained in lieu of the contracted engineer being involved. Should that be the case, the Clerk-Treasurer will create a spreadsheet with the various vendors/contractors involved being listed, pull the reports, and then submit the spreadsheet and reports to the Mayor for his sign-off. The second Internal Control issue pertains to the lack of oversight of Baker Tilly once they had modified the report from a cash basis report to an accrual report. Upon completion of the report by Baker Tilly, the Clerk-Treasurer will review and approve the report. As mentioned in Finding 2019-002, an alternate method may be that the finalized report will be submitted to the Board of Works by the Baker Tilly representative for their review and approval prior to submission. Anticipated Completion Date: These corrections will be implemented immediately.
2018-003
FAC accepted this audit on September 24, 2019 — management decision was due March 24, 2020.
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2017-003
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Show full finding ▾Hide full finding ▴FAC accepted this audit on September 24, 2019 — management decision was due March 24, 2020.
GSA_MIGRATION
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GSA_MIGRATION
FAC accepted this audit on March 18, 2018 — management decision was due September 18, 2018.
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