OFFICE OF INSPECTOR GENERAL

U.S. Election Assistance Commission

AUDIT OF THE HELP AMERICA VOTE ACT 

GRANTS AWARDED TO THE STATE OF INDIANA

Report No. G22IN0011-22-03

September 2, 2022
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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AUDIT OF THE HELP AMERICA VOTE

HIGHLIGHTS ACT GRANTS AWARDED TO THE STATE

OF INDIANA

Report No. G22IN0011-22-03 September 2, 2022

What OIG Audited 

The Office of Inspector General, through the

independent public accounting firm of McBride, 

Lock & Associates, LLC, audited funds received by

the State of Indiana under the Help America Vote 

Act (HAVA), including state matching funds and

program income, totaling $26.3 million.

Indiana’s Section 251 grant had not been closed

out as of the audit period and therefore was not 

included in the scope of the audit.

The objectives of the audit were to determine 

whether the State of Indiana: 

(1) Used funds for authorized purposes in

accordance with Section 101 of HAVA and

other applicable requirements;

(2) properly accounted for and controlled

property purchased with the HAVA payments;

and

(3) used funds in a manner consistent with the

informational plans provided to EAC.

What OIG Found

The Office of Inspector General found that the

Indiana Secretary of State generally accounted for 

HAVA funds in accordance with applicable

requirements and used the funds in a manner 

consistent with the informational plans that they had

submitted.

However, there were two exceptions (1) procedures 

did not allow for timely allocation of interest earned

on grant funds; and (2) subrecipient inventory 

listings for three counties did not include all required

elements.

What OIG Recommended

The Office of Inspector General made three

recommendations to address the noted deficiencies:

U.S. Election Assistance Commission | Office of Inspector General
 

 

 

 

 

 

 

OFFICE OF INSPECTOR GENERAL 

U.S. Election Assistance Commission 

DATE: 

TO: 

FROM: 

SUBJECT: 

September 2, 2022 

U.S. Election Assistance Commission, Interim Executive Director, Mark Robbins 

U.S. Election Assistance Commission, Inspector General, Brianna Schletz 

Audit of the Help America Vote Act Grants Awarded to the State of Indiana

(Report No. G22IN0011-22-03) 

This memorandum transmits the final report on Help America Vote Act grants awarded to the 

state of Indiana. The Office of Inspector General contracted McBride, Lock & Associates, LLC, an 

independent certified public accounting firm, to conduct the audit. The contract required that 

the audit be performed in accordance with U.S. generally accepted government auditing 

standards. We monitored the firm’s work to ensure that it adhered to those standards. 

Please keep us informed of the actions taken on the report’s three recommendations, as we 

will track the status of their implementation. 

We appreciate the assistance you and your staff provided to us during this audit. 

cc: Commissioner Thomas Hicks, Chair 

Commissioner Christy McCormick, Vice Chair 

Commissioner Benjamin W. Hovland 

Commissioner Donald L. Palmer 
 

 

McBRIDE, LOCK & ASSOCIATES, LLC 

Certified Public Accountants 

Established 1980 

Performance Audit Report 

Administration of Payments Received Under the Help America Vote Act by 

the Indiana Secretary of State 

Prepared for 

The United States Election Assistance Commission (EAC) 

Office of Inspector General 

By 

McBride, Lock & Associates, LLC 

July 2022 

4151 N. Mulberry Drive, Suite 275 p. 816-221-4559 admin@mcbridelock.com 

Kansas City, Missouri 64116 f. 816-221-4563 www.mcbridelock.com 
 

 

 

 

 

 

Performance Audit Report 

Administration of Payments Received Under the Help America Vote Act by 

the Indiana Secretary of State 

TABLE OF CONTENTS 

Page 

EXECUTIVE SUMMARY 1 

BACKGROUND 2 

AUDIT OBJECTIVES 4 

SCOPE AND METHODOLOGY 4 

AUDIT RESULTS 6 

APPENDICES: 

Appendix A-1: Response of the Indiana Secretary of State to the Draft Report 

Appendix A-2: Response of the U.S. Election Assistance Commission 

to the Draft Report 

Appendix B: Audit Scope and Methodology 

Appendix C-1: Election Security Expenditures by Budget Category and Program 

Category 

Appendix C-2: CARES Act Expenditures by Cost Category 

Appendix D: Monetary Impact as of September 30, 2020 for Election Security and as 

of December 31, 2020 for CARES Act Grant 
 

 

 

 

 

 

 

 

 

U.S. Election Assistance Commission 

Performance Audit Report 

Administration of Payments Received Under the Help America Vote Act by 

the Indiana Secretary of State 

EXECUTIVE SUMMARY 

McBride, Lock & Associates, LLC was engaged by the United States Election Assistance 

Commission (EAC) Office of the Inspector General to conduct a performance audit of the of the 

administration of payments received under the Help America Vote Act (HAVA or the Act) by the 

Indiana Secretary of State’s Office (Office). The payments received by the Office are identified as 

Election Security and the CARES Act. The scope of the audit includes: Election Security 

administration from inception on September 14, 2018 through September 30, 2020; CARES Act 

administration from inception on April 30, 2020 through December 31, 2020, including matching 

fund expenditures made after December 31, 2020. The objective of the audit was to determine 

whether the Office used payments authorized by Sections 101 and 251 of the Help America Vote 

Act of 2002 (the HAVA) in accordance with HAVA and applicable requirements; properly 

accounted for and controlled the funds and property purchased with HAVA payments; and, used 

the funds in a manner consistent with the budget plan provided to EAC. The Office’s Section 251 

grant had not been closed out as of the audit period and therefore was not included in the scope of 

our audit. 

In addition, the Commission requires states to comply with certain financial management 

requirements, specifically: 

• Expend payments in accordance with Federal cost principles established by the Office of 

Management and Budget (OMB) – (2 CFR 200). 

• Submit detailed annual financial reports on the use of Title I payments. 

• Maintain documents and records subject to audit to determine whether payments were used 

in compliance with HAVA. 

We conducted this performance audit in accordance with Generally Accepted Government 

Auditing Standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable basis 

for our findings and conclusions based on the audit objectives. 

Based on the audit procedures performed, except for the matters discussed below, we concluded 

that the Office generally accounted for and expended the Grant funds in accordance with the 

requirements mentioned above and for the periods mentioned above. The exceptions are as 

follows: 

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1. Interest earned on HAVA grant funds had not been fully allocated to the Secretary of 

State’s election fund as of September 30, 2020. The Office reported $190,781 of Program 

Income earned on Election Security grant funds on the September 30, 2020 Federal 

Financial Report (FFR) based on information provided by the State Treasurer’s office. The 

PeopleSoft fund used to account for the Election Security grants reflected only $3,385 of 

interest income earned on Election Security grant funds. The Office subsequently received 

an analysis from the State Treasurer’s office showing actual interest earned of $209,311 

through September 30, 2020. 

2. The equipment inventory listings for three counties who received election equipment 

purchased with 2020 Election Security grant funds did not contain the information required 

by the Uniform Guidance. The Office purchased $968,175 of election equipment on behalf 

of Fulton, Cass, and Gibson Counties. The Office made the payments to the vendor but the 

equipment was delivered directly to the counties, therefore, the items were not recorded in 

the Office’s equipment inventory. The property records provided by each of the three 

counties did not include all information required by 2 CFR 200. The listings were limited 

to description and serial number. A sample of items purchased were physically viewed and 

were determined to exist. 

We have included in this report as Appendix A, the Secretary of State’s written response to the 

draft report. Such response has not been subjected to audit procedures and, accordingly, we do not 

provide any form of assurance on the appropriateness of the response or the effectiveness of the 

corrective actions described therein. 

BACKGROUND 

The Help America Vote Act of 2002 (HAVA) created the U.S. Election Assistance Commission 

(Commission) to assist States and insular areas (hereinafter referred to as States) with improving 

the administration of federal elections and to provide funds to States to help implement these 

improvements. The Commission administers grants to States authorized by HAVA under Title I, 

as follows: 

• Title I, Section 101 payments are for activities such as complying with Title III of HAVA 

for uniform and nondiscriminatory election technology and administration requirements; 

improving the administration of elections for Federal office; educating voters; training 

election officials and poll workers; developing a state plan for requirements payments; 

improving, acquiring, leasing, modifying, or replacing voting systems, and methods for 

casting and counting votes; improving the accessibility and quantity of polling places; and 

establishing toll-free telephone hotlines that voters may use. 

The HAVA Election Security and CARES Act grants also require that states must: 

• Maintain funds in a state election fund (as described in Section 104 (d) of HAVA). 

• Expend payments in accordance with Federal cost principles established by the Office of 

Management and Budget (OMB) – (2 C.F.R. § 200). 

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• Submit detailed annual financial reports on the use of Title I payments. Reports must 

include a summary of expenditures aligned with budget categories in the grantee’s plan, a 

list of equipment obtained with the funds, and a description of how the funded activities 

met the goals of the plan. 

• Provide matching funds of the Federal funds within a period stipulated by the award to be 

documented on the annual SF-425 submission 

• Maintain documents and records subject to audit to determine whether payments were used 

in compliance with HAVA. 

The Awardee – The Indiana Secretary of State 

The HAVA funds were awarded to the Indiana Secretary of State (SOS), whose mission statement 

is as follows: “It is the mission of the office of Secretary of State Holli Sullivan to deliver to the 

people of Indiana government-as-a-service that focuses on unqualified integrity and accuracy in 

our elections, consistent and principled regulatory methods, ceaseless protection of Hoosier 

investors, and the most efficient use of taxpayer resources.” 

The Elections Division of the Secretary of State’s office is a bipartisan commission comprised of 

an equal number of Democrats and Republicans, with the SOS serving as a tie-breaking vote if the 

two co-directors of the bipartisan commission are unable to resolve issues dealing with the budget 

or expenditures of contracts. The Commission is charged with administering statewide elections, 

with the responsibility for actual conduct of elections vesting with county election boards. 

Administrative responsibilities of the bipartisan commission include overseeing the candidate 

declaration process, certifying election results, maintaining campaign finance reports and 

supervising local elections officials. 

Additionally, the SOS maintains a database of all approved voting systems, reviews reports 

concerning these systems, performs audits, reviews contracts and leases for the systems and 

performs random, public tests of election machines. 

Help America Vote Act State of Indiana State Plans 

The Indiana Secretary of State’s HAVA budget narratives were prepared by the Secretary of State. 

Election Security 2018 and 2020 

The main objectives of the 2018 Election Security grant were to modernize and maximize security 

through implementation of cybersecurity projects across the Statewide Voter Registration System 

(SVRS), including an assessment of risk and vulnerabilities, establishment of a strategic 

framework for the state’s cybersecurity initiatives, and mandatory public testing of voting 

equipment, hardware and software. This includes expansion of a multifactor authentication pilot 

project to all 92 counties, in addition to a partnership with the Department of Homeland Security 

(DHS) and the Multi-State Information and Analysis Center (MS-ISAC) to install Albert Sensors, 

which are a network monitoring solution that provides automated alerts of network threats. 

There were two primary objectives for the 2020 Election Security grant as follows: 

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1. Purchase of new voter-verifiable paper audit trail voting equipment for counties with the 

greatest need to upgrade voting systems. Estimated cost of $7,681,919. 

2. Purchase of voter-verifiable paper audit trail (VVPAT) equipment. 

CARES Act 

The objective of the 2020 CARES Act was to prevent, prepare for, and respond to coronavirus, 

domestically or internationally, for the 2020 Federal election cycle. To address the impacts of 

coronavirus on the election, the State implemented a no-excuse absentee by mail voting for the 

June primary election and purchased sanitization products and personal protective equipment 

(PPE), which were distributed among elections staff and poll workers. Media costs were incurred 

to advertise the new election dates and voting guidelines. Additionally, funds were passed through 

to counties to use for additional staffing, facility rental, equipment needs, and personal protection 

equipment supplies to protect election workers against the virus. 

AUDIT OBJECTIVES 

The objectives of our audit were to determine whether the Office: 

1. Used funds for authorized purposes in accordance with Section 101 of HAVA and other 

applicable requirements; 

2. Properly accounted for and controlled property purchased with HAVA payments; and 

3. Used the funds in a manner consistent with the informational plans provided to EAC. 

In addition to accounting for Grant payments, the Grant requires states to maintain records that are 

consistent with sound accounting principles that fully disclose the amount and disposition of the 

payments, that identify the project costs financed with the payments and other sources, and that 

will facilitate an effective audit. The Commission requires states receiving Grant funds to comply 

with certain financial management requirements, specifically: 

• Expend payments in accordance with Federal cost principles established by the Office of 

Management and Budget (OMB) – (2 CFR 200). 

• Submit detailed annual financial reports on the use of Title I payments. 

• Maintain documents and records subject to audit to determine whether payments were used 

in compliance with HAVA. 

SCOPE AND METHODOLOGY 

We audited the Election Security grant funds received and disbursed by the Office from September 

14, 2018, through September 30, 2020. These funds are related to the appropriation of $380 million 

under the Consolidated Appropriations Act (CAA), 2018 (P.L. 115-151) and $425 million under 

the CAA, 2020 (P.L. 115-141). We audited the CARES Act grant funds received and disbursed by 

the Office from April 30, 2020 through December 31, 2020. These funds are related to the $400 

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million authorized by the U.S. Congress under the Coronavirus Aid, Relief and Economic Security 

Act (P.L. 116-136). The scope of activity audited is shown in the following table: 

Election CARES 

Description Security Funds Act Funds 

Funds Received from EAC $ 16,140,537 $ 8,013,610 

State Matching Funds 379,754 1,602,722 

Program Income 190,781 6,445 

Total Funds $ 16,711,072 $ 9,622,777 

Less Disbursements (9,196,547) (9,542,876) 

Fund Balance $ 7,514,525 $ 79,901 

Program income in the above table consists entirely of interest earned on the federal funds as 

reported in the program income section of the federal financial reports. 

The Office’s Election Security expenditures detailed by budget and program category are included 

as Appendix C-1, and the CARES Act expenditures detailed by cost category are included as 

Appendix C-2. The Office did not provide a detail of subgrant spending by program category, so 

that detail is not presented. 

In planning and performing our audit, we identified the following internal control components and 

underlying internal control principles as significant to the audit objective: 

Objective Component Principle 

1 Control Activities Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

Information and Communication Uses Relevant Information 

Communicates Internally 

2 Control Activities Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

Information and Communication Communicates Externally 

3 Control Activities Selects and develops control activities 

Selects and develops general controls over technology 

Deploys through policies and procedures 

We assessed the design, implementation, and operating effectiveness of these internal controls and 

identified deficiencies that we believe could affect the Office’s ability to use funds for authorized 

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purposes, and properly account for and control property. The internal control deficiencies we found 

are discussed in the Audit Results section of this report. 

Additionally, for the components and principles which we determined to be significant, we 

assessed the internal controls and compliance with laws and regulations necessary to satisfy the 

audit objective. 

However, because our review was limited to these internal control components and underlying 

principles, it may not have disclosed all internal control deficiencies that may have existed at the 

time of this audit. 

AUDIT RESULTS 

We conducted this performance audit in accordance with Generally Accepted Government 

Auditing Standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable basis 

for our findings and conclusions based on the audit objectives. 

Based on the audit procedures performed, we concluded that the Office generally accounted for 

HAVA funds in accordance with the requirements mentioned above and used the funds in a manner 

consistent with informational plans submitted during the audit period. The exceptions to applicable 

compliance requirements are described below. 

Finding No. 1 – Program Income 

Interest earned by the state on HAVA funds had not been fully allocated to the Secretary of State’s 

election fund as of September 30, 2020. HAVA funds were pooled with other federal grant funds 

and invested by the State Treasurer’s office. The Office reported $190,781 of Program Income 

earned on Election Security grant funds on the September 30, 2020 FFR based on information 

provided by the State Treasurer’s office at the time of the filing of the report. The PeopleSoft fund 

used to account for the Election Security grants reflected only $3,385 of earned interest income on 

Election Security grant funds. The Office subsequently received an analysis from the State 

Treasurer’s office showing actual interest earned of $209,311 through September 30, 2020. 

The Notice of Grant Award for the 2018 and 2020 Election Security grant funds states, “Interest 

earned on this award’s funds and any net program income shall be retained in the election fund 

and used for allowable activities in Section 101 of HAVA.” 

In researching the issue, the Office determined that the standard operating procedure of prior grant 

administrators had been to calculate daily grant fund balances and coordinate the calculation and 

transfer of interest to the Secretary of State’s funds with the State Treasurer on a quarterly basis. 

In late 2017, the Office’s remaining long-term grant administrator retired and between 2018 and 

the present the Office has employed two grant administrators in training mode. Due to staff 

inexperience, COVID remote working arrangements and pressures of an unusually demanding 

election cycle, Office staff did not continue to follow the quarterly grant interest calculation and 

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transfer procedure. On January 3, 2022, $209,311 of interest earned was transferred to the Office’s 

HAVA grant funds. 

Program income earned on federal funds which is required to be used in furtherance of the grants 

may not be able to be expended and may not be properly reported if not allocated to the Office’s 

Election fund in accordance with the terms of the grant. 

Recommendation 

We recommend that the EAC work with the Office to: 

1. Determine the proper amount of program income to be reported on the Election Security 

grant FFR’s through September 30, 2020 and revise this FFR and any subsequent FFR’s 

as necessary. 

2. Ensure that proper procedures and training are in place to ensure timely allocation of 

interest earned on HAVA funds to the Office’s election funds. 

Secretary of State’s Response: 

With respect to Finding No. 1 (timely calculation and transfer of grant interest income to program 

funds) as of January 3, 2022, grant interest for the audit term was allocated to the state Election 

Program Fund. As of August 12, 2022, audit term and subsequent FFRs were revised and filed 

with the EAC. As of April 2022, the Indiana Treasurer’s office implemented procedures for 

automatic monthly calculation and allocation of grant interest to the state Election Program Fund. 

Since receipt of the Draft Report in July 2022, the office has developed Uniform Guidance 

compliant grant interest income allocation tracking procedures for our grant administration staff 

to follow. Training and implementation of the procedures will be complete by August 31, 2022. 

Auditor’s Response: 

The proposed corrective actions, if implemented, would be sufficient to resolve the findings. 

Finding No. 2 – Subrecipient Inventory Listings 

The equipment inventory listings for three counties who received election equipment purchased 

with 2020 Election Security grant funds did not contain the information required by the Uniform 

Guidance. The Office purchased $968,175 of election equipment on behalf of Fulton, Cass, and 

Gibson Counties. The Office made the payments to the vendor but the equipment was delivered 

directly to the counties, therefore, the items were not recorded in the Office’s equipment inventory. 

The property records provided by each of the three counties did not include all information 

required by 2 CFR 200. The listings were limited to description and serial number. A sample of 

items purchased were physically viewed and were determined to exist. 

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal 

Awards (Uniform Guidance) at 2 CFR 200.331 (d) states that all pass-through entities must: 

“Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for 

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authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions 

of the subaward; and that subaward performance goals are achieved.” 2 CFR 200.313(d)(1) 

requires that “property records must be maintained that include a description of the property, a 

serial number or other identification number, the source of funding for the property (including the 

FAIN), who holds title, the acquisition date, and 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 sale price of the property.” 

The Office did not perform activity monitoring sufficient to ensure that subrecipients were 

maintaining property records in compliance with Federal statutes and the terms and conditions of 

the awards. The Office relied on the requirements that counties follow the accounting policies 

prescribed for units of local government by the Indiana State Board of Accounts. These policies 

only require that counties include a “Schedule of Capital Assets” as supplementary information in 

their audited financial statements and do not state requirements for maintaining inventory listings. 

The Office also operates the Voting System Technical Oversight Program (VSTOP) which 

requires county election boards to report all election equipment in a database by January 31 each 

year. However, the VSTOP inventory database also does not contain all of the information required 

by the Uniform Guidance. 

Proper monitoring of subrecipients ensures that equipment purchased with federal funds is being 

used and disposed of in accordance with federal regulations. 

Recommendation 

3. We recommend that the EAC work with the Office to implement procedures and training 

to ensure that all property purchased with federal funds by or on behalf of subrecipients is 

maintained in an inventory listing that is compliant with the Uniform Guidance 

requirements. 

Secretary of State’s Response: 

With respect to Finding No. 2 (monitoring subrecipient compliance with equipment 

recordkeeping) as of this date, our Director of Election Modernization has outlined plans to 

establish a routine monitoring system for subrecipient equipment recordkeeping within the office, 

and a program to provide equipment recordkeeping training and assistance to subrecipients. Our 

Director of Election Modernization has been charged with finalizing the subrecipient equipment 

recordkeeping monitoring, training, and assistance plan no later than October 31, 2022. In 

recognition of the significant responsibilities the current election cycle poses on subrecipient 

counties, the equipment recordkeeping monitoring, training, and assistance program will be 

implemented in phases starting January 1, 2024 with completion no later than December 31, 2024. 

Auditor’s Response: 

The proposed corrective actions, if implemented, would be sufficient to resolve the findings. 

8 
 

 

The Office responded on August 19, 2022, and generally agreed with the report’s findings and 

recommendations. The EAC responded on August 11, 2022, and stated they will work with the 

Indiana Secretary of State to implement and complete appropriate corrective action on the findings. 

The Office’s complete response is included as Appendix A-1 and the EAC’s complete response as 

Appendix A-2. 

McBride, Lock & Associates, LLC performed the related audit procedures between July 7, 2021 

and July 20, 2022. 

McBride, Lock & Associates, LLC 

Kansas City, Missouri 

July 20, 2022 

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APPENDIX A-1 

Response of the 

Indiana Secretary of State 

to the Draft Report 
SECRETARY OF STATE 

STATE OF INDIANA 

200 W. WASHINGTON STREET, INDIANAPOLIS, IN 46204 

(by email in Microsoft Word and accessible .pdfformat) 

August 19, 2022 

Brianna Schletz, Inspector General 

Office ofthe Inspector General 

U.S. Election Assistance Commission 

633 3rd St-reet, NW Suite 200 

Washington, DC 20001 

Dear Inspector General ScWetz, 

On behalf of Indiana Secretary of State Holli Sullivan, our agency would like to extend 

compliments to the staff ofthe U.S. Election Assistance Commission, McBride, Lock & 

Associates, LLC, as well as Indiana's state and local election administrators, for 

professionalism and dedication to effective utilization ofHAVA Election Security and 

CARES Act grants, especially under recent unusual and demanding circumstances. 

The Office has reviewed the July 2022 Draft Report: Audit ofthe Help America Vote Act 

Grants Awarded to the State ofIndiana and concurs with the audit findings and proposed 

recommendations. 

With respect to Finding No. I (timely calculation and transfer of grant interest income to 

program funds) as ofJanuary 3, 2022, grant interest for the audit term was allocated to 

the state Election Program Fund. As ofAugust 12, 2022, audit term and subsequent FFRs 

were revised and filed with the EAC. As ofApril 2022, the Indiana Treasurer's office 

implemented procedures for automatic monthly calculation and allocation of grant 

interest to the state Election Program Fund. Since receipt ofthe Draft Report in July 

2022, the office has developed Uniform Guidance compliant grant interest income 

allocation tracking procedures for our grant administration staff to follow. Training and 

implementation ofthe procedures will be complete by August 31, 2022. 

With respect ofFinding No. 2 (monitoring subrecipient compliance with equipment 

recordkeeping) as ofthis date, our Director ofElection Modernization has outlined plans 

to establish a routine monitoring system for subrecipient equipment recordkeeping within 

the office, and a program to provide equipment recordkeeping training and assistance to 

subrecipients. Our Director ofElection Modernization has been charged with finalizing 

the subrecipient equipment recordkeeping monitoring, training, and assistance plan no 

later than October 31, 2021. In recognition ofthe significant responsibilities the current 

election cycle poses on subrecipient counties, the equipment recordkeeping monitoring, 

Page 1 of 2 
training, and assistance program will be implemented in phases starting January 1, 2024 

with completion no later than December 31, 2024. 

Our Election Modernization Coordinator has been directed to report completion ofthese 

resolution activities to the Secretary of State and the EAC Grants Office. 

Truly r;>~\1.~A 

Rachel~ffmeyer, De;ei~ Se~r;1a; clState 

Office ofIndiana Secretary of State Holli Sullivan 

Page 2 of2 
APPENDIX A-2 

Response of the 

U.S. Election Assistance Commission 

to the Draft Report 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. ELECTION ASSISTANCE COMMISSION 

633 3rd Street, NW. Suite 200 

Washington, DC 20001 

TO: Brianna Schletz, Inspector General 

FROM: Kinza Ghaznavi 

Grants Director 

DATE: August 11, 2022 

RE: Response to Draft Audit Report of Grants Awarded to the Indiana Office 

of the Secretary of State, OIG Report G22IN0011-22-0X 

This is the EAC’s response to the OIG draft audit of HAVA funds awarded to Indiana 

Secretary of State’s Office (Office) and serves as the EAC’s management decision. The 

scope of the audit included HAVA 101 Election Security and CARES grants. The EAC 

agrees with the recommendations and describes our management decisions related to 

each one below. 

Finding #1 and Recommendations #1 and #2, Interest Earned: The auditors noted 

that interest earned on the Election Security, as reported in the Program Income section 

of the 2020 FFR, was not fully allocated. The auditors recommended that the EAC work 

with the Office to: 

1. Determine the proper amount of interest earned to be reported on the Election 

Security grant FFRs through September 30, 2020 and revise this FFR and any 

subsequent FFRs as necessary. 

2. Ensure that proper procedures and training are in place to ensure timely allocation of 

interest earned on HAVA funds to the Office’s election funds. 

Management Decision: The Office worked with the state treasury department to 

calculate the correct amount of interest earned on the 2018 funds for the period 

ending September 30, 2020. The total amount, $209,311, was deposited into the State 

Election Fund, and the relevant FFRs were revised. Grant staff reviewed and 

approved the calculations and corrected FFRs. The Treasury department developed an 

automated procedure to calculate interest earned going forward. Based on this 

automated process, the Office will revise its procedures to include regular review of 

the calculations prior to reporting the interest earned on FFRs. The Office expects to 

have the procedures updated and implemented by August 31. 
 

 

 

Finding #2 and Recommendation #3, Subrecipient Inventory Listings: The auditors 

determined that equipment inventory listings for three counties that received election 

equipment purchased with 2020 Election Security grant funds did not contain the 

information required by the Uniform Guidance. The auditors recommended that the EAC 

require the Office to implement procedures and training to ensure that all property 

purchased with federal funds by, or on behalf of subrecipients, is maintained in an 

inventory listing that is compliant with the Uniform Guidance requirements. 

Management Decision: The state government supports a statewide inventory 

program for certified election equipment which is maintained for all counties. The 

Office is evaluating that system to determine if it can be updated to include all 

elements required to be included on inventories when purchases are supported with 

federal grant funds and if the property listings can be expanded to include certified 

and non-certified equipment. Alternatively, they are considering developing inventory 

procedures for their subrecipients outside of the statewide program and training them 

on the new system once the November election cycle is completed. They will make 

the decision on which approach to take by August 31, 2022. 

The EAC expects to review the actions and documentation provided by the state by 

September 30, 2022. 

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Appendix B 

AUDIT SCOPE AND METHODOLOGY 

Our audit methodology included: 

• Assessing audit risk and significance within the context of the audit objectives. 

• Obtaining an understanding of internal control that is significant to the administration of 

the HAVA funds and of relevant information systems controls as applicable. 

• Identifying sources of evidence and the amount and type of evidence required. 

• Determining whether other auditors have conducted, or are conducting, audits of the 

program that could be relevant to the audit objectives. 

As part of our audit, we gained an overall understanding of the internal control environment at the 

Office. Based on this understanding, we identified certain internal controls that we considered to 

be significant (or key controls) to achieving each objective. All components of internal control are 

relevant, but not all may be significant. Significance is defined as the relative importance of a 

matter within the context in which it is being considered, and is a matter of professional judgment. 

We made the following determination as to the significance of the underlying internal control 

principles: 

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Objective 

1 2 3 

Control Environment 

1 Demonstrates Commitment to integrity and ethical values No No No 

2 Exercises oversight responsibility No No No 

3 Establishes structure, authority, and responsibility No No No 

4 Demonstrates commitment to competence No No No 

5 Enforces accountability. No No No 

Risk Assessment 

6 Specifies suitable objectives No No No 

7 Identifies and analyzes risk No No No 

8 Assesses fraud risk No No No 

9 Identifies and analyzes significant change No No No 

Control Activities 

10 Selects and develops control activities Yes Yes Yes 

11 Selects and develops general controls over technology Yes Yes Yes 

12 Deploys through policies and procedures Yes Yes Yes 

Information and Communication 

13 Uses relevant information Yes No No 

14 Communicates internally Yes No No 

15 Communicates externally No Yes No 

Monitoring 

16 Conducts ongoing and/or separate evaluations No No No 

17 Evaluates and communicates deficiencies No No No 

The significance was determined as follows: 

Objective 1: Control Activities and its underlying principles were deemed to be significant to our 

determination of the awardee’s compliance with the objective. The Control Activities component 

includes the design and implementation of specific tasks performed by individuals within the entity 

to fulfill their duties and responsibilities and to respond to identified risks. These principles address 

the design and implementation of activities related to management review, segregation of duties 

(including restriction of access with the information system), and documentation of internal 

controls and transactions. We determined these principles to be the most significant to the state’s 

proper use of funds and compliance with award requirements. 

The Information and Communication principles of Use Relevant Information and Communicate 

Internally were deemed to be significant to our determination of the awardee’s compliance with 

the federal financial reporting portion of this objective. These principles address the relevance of 

the information and the internal communication processes used to compile the data necessary to 

meet the state’s reporting objectives. 

15 
 

 

 

 

 

 

 

Objective 2: Control Activities and its underlying principles were deemed to be significant to our 

determination of the awardee’s compliance with the objective. The Control Activities component 

includes the design and implementation of specific tasks performed by individuals within the entity 

to fulfill their duties and responsibilities and to respond to identified risks. These principles address 

the design and implementation of activities related to management review, segregation of duties 

(including restriction of access with the information system), and documentation of internal 

controls and transactions. We determined these principles to be the most significant to the state’s 

proper accounting and control over equipment purchased with HAVA funds. 

The Information and Communication principle of Communicate Externally was deemed to be 

significant to our determination of the awardee’s compliance with the objective because the state 

communicated with and relied on information from the counties where the equipment is located as 

part of the control system for accounting and controlling equipment purchased with HAVA funds. 

Objective 3: Control Activities and its underlying principles were deemed to be significant to our 

determination of the awardee’s compliance with the objective. The Control Activities component 

includes the design and implementation of specific tasks performed by individuals within the entity 

to fulfill their duties and responsibilities and to respond to identified risks. These principles address 

the design and implementation of activities related to management review, segregation of duties 

(including restriction of access with the information system), and documentation of internal 

controls and transactions. We determined these principles to be the most significant to the state’s 

use of funds in a manner consistent with the plans provided to EAC. 

To implement our audit methodology, below are some of the audit procedures we performed. 

• Interviewed appropriate Office employees about the organization and operations of the 

HAVA program. 

• Reviewed prior single audit reports and other reviews related to the State’s financial 

management systems and the HAVA program for the period under review. 

• Reviewed policies, procedures and regulations for the Office management and accounting 

systems as they relate to the administration of the HAVA program. 

• Tested major purchases and the supporting documentation. 

• Tested randomly sampled payments made with HAVA funds. 

• Evaluated compliance with the requirements for accumulating financial information 

reported to the Commission on the financial status reports and progress reports, accounting 

for property, purchasing HAVA related goods and services, and using funds in a manner 

consistent with the budget plan provided to EAC. 

• Verified the establishment and maintenance of an election fund. 

• Observed the physical security/safeguards of selected equipment purchased with HAVA 

funds and ensure compliance with federal regulation. 

• Verified whether the matching requirement was met and, if so, that matching expenditures 

met the prescribed criteria and allowability requirements of HAVA. 

• Verified program income and interest income was properly accounted for and not remitted 

to the State’s general fund. 

16 
 

 

 

 

 

 

 

 

 

 

Appendix C-1 

ELECTION SECURITY EXPENDITURES BY BUDGET CATEGORY AND PROGRAM CATEGORY 

SEPTEMBER 14, 2018 TO SEPTEMBER 30, 2020 

Program Categories 

Budget Categories 

Personnel (Including Fringe) 

Equipment 

Subgrants 

Training 

All Other Costs 

Voting 

Equipment 

$ -

-

250,765 

-

-

Election 

Auditing 

$ -

-

-

-

-

Voter 

Registration 

Systems 

$ -

-

-

-

-

Cyber 

Security 

$ -

35,134 

1,201,932 

2,074 

7,101,888 

Communications 

$ -

-

-

-

225,000 

$ 

Other 

-

-

-

-

-

$ 

Total 

-

35,134 

1,452,697 

2,074 

7,326,888 

Total Direct Costs 

Indirect Costs (if applied) 

$ 250,765 

-

$ -

-

$ -

-

$ 8,341,028 

-

$ 225,000 

-

$ -

-

$ 8,816,793 

-

Total Federal Expenditures 

Non-Federal Match 

Total Program Expenditures 

$ 250,765 

-

$ 250,765 

$ -

149,739 

$149,739 

$ -

230,015 

$ 230,015 

$ 8,341,028 

-

$ 8,341,028 

$ 225,000 

-

$ 225,000 

$ 

$ 

-

-

-

$ 

$ 

8,816,793 

379,754 

9,196,547 

17 
 

 

 

 

Appendix C-2 

CARES ACT EXPENDITURES BY COST CATEGORY 

APRIL 30, 2020 TO DECEMBER 31, 2020 

Expenditure Type 

Cost Category Federal Match Total 

Voting Processes $ 2,273,900 $ 555,429 $2,829,329 

Security and Training 6,968 1,044,488 1,051,456 

Communications 2,643,598 2,805.00 2,646,403 

Supplies (including PPE) 3,089,144 - 3,089,144

Total CARES Expenditures $ 8,013,610 $1,602,722 $9,616,332 

NOTE: Amounts as reported by state in EAC Progress Report included with December 31, 2020 FFR. Federal expenditures include 

$73,456 of unliquidated obligations. 

18 
 

 

Appendix D 

MONETARY IMPACT AS OF SEPTEMBER 30, 2020 FOR ELECTION 

SECURITY AND AS OF DECEMBER 31, 2020 FOR CARES ACT GRANT 

Description 

Questioned 

Costs 

Unsupported 

Costs 

Additional 

Funds for 

Program 

Program Income $ - $ - $ 187,396

Total $ - $ - $ 187,396

19 
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