BEDFORD – The Indiana State Board of Accounts released its findings from a recent audit. A copy of the audit can be found here.
The State Board of Accounts audited the financial statement of the County, as of and for the year ended December 31,
2020, and the related notes to the financial statement and issued a report on March 15, 2022, which contained a dual opinion on the financial statement. The report was released to the public on Friday, March 25, 2022.
“We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs as items 2020-001 and 2020-002, that we consider being material weaknesses,” wrote Beth Kelley, CPA, CFE Deputy State Examiner
“As part of obtaining reasonable assurance about whether the County’s financial statement is free
of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions were not an objective of our audit, and, accordingly, we do not express such an opinion. The
results of our tests disclosed instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards and which are described in the accompanying Schedule of Findings
and Questioned Costs as items 2020-001 and 2020-002.”
The County did respond to the findings identified in the audit and provided a corrective action plan.
The state found a deficiency in the internal control system of the County Auditor related to financial transactions and reporting.
The report stated the County Auditor’s office (Jody Edwards was auditor during this time frame) had not established an effective system of internal control over the preparation of the financial statement and reporting. The County Auditor prepared and submitted the financial information to the Indiana Gateway for Government Units financial reporting system, which was the source of the County’s Annual Financial Report (AFR) and financial statement. There were no documented internal controls to prevent, detect, and correct, errors in financial information prior to submission.
The financial statement presented for audit included the following errors:
- The beginning cash and investments balance of eight funds was overstated by $15,904.
- The receipts of eight funds were overstated by $106,622.
- The disbursements of twenty-six funds were understated by $189,747.
- Additionally, there were material classification errors for receipts and disbursements.
Audit adjustments were proposed, accepted by the County, and made to the financial statement.
Management had not established a system of internal control that would have ensured proper reporting of transactions and the financial statement.
Without a proper system of internal control in place that operated effectively, material misstatements, or irregularities of the AFR and financial statement, remained undetected. The financial statement included the errors identified in the Condition and Context.
This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2019-001.
The County had not established internal controls over the federal award information entered in the Indiana Gateway for Government Units financial reporting system, which was the source of the County’s Schedule of Expenditures of Federal Awards (SEFA). The County did not have a proper system of internal control in place to prevent or detect and correct, errors on the SEFA.
The SEFA presented for audit included the following errors:
- The Crime Victim Assistance grant expenditures were understated by $14,034.
- The Violence Against Women Formula Grants was omitted, which understated expenditures by $38,316.
- The Edward Byrne Memorial Justice Assistance Grant Program expenditures were understated by $50,360.
- One project within the Highway Planning and Construction Cluster (Cluster) was omitted, which understated expenditures by $23,738. Additionally, one project in the Cluster was understated by $19,464, and one project in the Cluster was overstated by $6,085, which resulted in a net understatement of $37,117.
- The State and Community Highway Safety grant expenditures were understated by $9,626.
- The National Priority Safety Programs grant expenditures were overstated by $17,554. Additionally, the Assistance Listings Number was incorrect.
- The Airport Improvement Program grant expenditures were overstated by $20,928.
- The Minimum Penalties for Repeat Offenders for Driving While Intoxicated grant expenditures were overstated by $12,973.
- The COVID-19 – Coronavirus Relief Fund grant expenditures were understated by $26,034. In addition, the amount passed through to sub-recipients was omitted, which understated expenditures by $17,277.
- The COVID-19 – 2020 HAVA CARES Act Grant was omitted, which understated expenditures by $57,955.
- The Public Health Emergency Preparedness grant expenditures were understated by $1,370.
- The Immunization Cooperative Agreements grant expenditures were understated by $14,015.
- The Child Support Enforcement grant expenditures were overstated by $22,445.
- The Opioid STR grant was reported as a reimbursement grant instead of an advanced grant, which understated expenditures by $3,263.
- Three grants were reported in error, which overstated expenditures by $62,856.
- Other errors included incorrect program names, pass-through entity names, and passthrough identifying numbers.
Audit adjustments were proposed, accepted by the County, and made to the SEFA presented in this report.
Current Auditor Jessica Staggs has since completed the AFR for 2021 both timely and accurately. Once all the data was uploaded and completed in Gateway, she and her first deputy reviewed the information entered for any errors and then initialed the documents to show that the information was verified for accuracy. Staggs said all the errors were corrected when working on the 2021 AFR and submitted on March 1, 2022.
“We made recommended corrections per State Board of Accounts to the 2020 SEFA. Moving forward, all department heads that are involved in the grants and possess the proper knowledge of said grants will be required to review the SEFA for accuracy and sign off on the grant schedule that is completed by the bookkeeper and myself for the Annual Report,” Staggs wrote. “In addition, my office is working on creating a spreadsheet for each department to complete, which can then be reviewed by myself and the bookkeeper. The sam.gov website will further be utilized to help verify information such as agency titles, CFDA numbers, and grant amounts.
Staggs noted that the anticipated completion date is April 1, 2022.
In addition to this report, other reports may have been issued for the County. All reports can be
found on the Indiana State Board of Accounts’ website.