Books and Records Not Kept on Accrual Basis of Accounting. Condition and context: Management did not keep AJAC's books and records on the accrual basis of accounting. Effect or potential effect: Total revenue was adjusted by approximately $762,000. Cause: General ledger account reconciliations were not performed and reviewed monthly. Criteria: Uniform Guidance 2 CFR 200 Subparts D and E requires accounting books and records to be kept on the accrual basis of accounting in accordance with generally accepted accounting principles (U.S. GAAP), which requires revenues be recognized when earned and expenses recorded when incurred. Recommendations: We recommend management keep the accounting books and records on the accrual basis of accounting. We recommend management review and revise current accounting policies and procedures to ensure that all general ledger accounts are reconciled and reviewed monthly. Responsible official's response: AJAC implemented monthly account reconciliations and review by AJAC Directors and Supervisors, this will ensure that the accounting books and records are kept on the accrual basis of accounting.
Internal Control Policies and Procedures. Condition and Context: AJAC did not have appropriate internal control policies and procedures to ensure accurate financial reporting, including in the areas of: 1) records management, 2) personnel policies, 3) financial reporting, 4) cash management, 5) cost allocation, and 6) formal audit and audit resolution systems. Effect or potential effect: Inaccuracies and delays in reporting of accounting information. Cause: Lack of appropriate cost allocation policies and procedures. Criteria: The Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Framework (Internal Control Framework) states management is responsible for maintaining and following appropriate policies and procedures to ensure accurate financial reporting. Recommendations: We recommend management review AJAC's current policies and procedures to ensure accurate financial reporting. We recommend that management provide regular monitoring and oversight of the internal control policies and procedures of the organization. Responsible official's response: Internal control policies and procedures were updated in order to address this finding. All financial reporting policies and procedures will be reviewed and updated on an annual basis by AJAC Directors and Supervisors.
Finding 2022-003: Internal Controls related to Compliance with Grant Agreement. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Cost Principles, Reporting. Type of finding: Material Weakness. Condition: AJAC did not have appropriate internal control policies and procedures to ensure compliance with grant and contract requirements. Effect or potential effect: Findings of noncompliance and inaccuracies and delays in reporting of accounting information. Cause: This condition was the result of lack of oversight and improper policies and procedures. Criteria: Uniform Guidance 2 CFR 200.303 requires that all non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the organization is managing the federal awards. Context: AJAC did not have appropriate internal control policies and procedures to ensure compliance with grants and contracts, including in the areas of: 1) priority service to veterans, 2) project modification process, 3) formal procurement standards, 4) records management, 5) personnel policies, 6) financial reporting, 7) cash management, 8) match policies, 9) cost allocation, and 10) formal audit and audit resolution systems. Questioned costs: None. Recommendations: We recommend management review AJAC’s current policies and procedures to ensure compliance. We recommend that management provide regular monitoring and oversight of the internal control policies and procedures of the organization. Views of the responsible officials and planned corrective actions: Internal control policies and procedures were updated in order to address this finding. All policies and procedures related to federal grant agreement compliance will be reviewed and updated on an annual basis by AJAC Directors and Supervisors.
Finding 2022-004: Allocation of Employee Benefit Expenses. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Cost Principles, Reporting. Type of finding: Material Noncompliance, Material Weakness. Condition: Employee benefit costs were charged to the grant using a fixed percentage rate that did not accurately reflect the actual cost of the employee benefits. Effect or potential effect: The fixed percentage rate used to charge employee benefits did not accurately reflect the actual cost incurred and resulted in incorrect reporting of expense to the federal agency. Cause: Lack of appropriate policies and reconciliation procedures. Criteria: Uniform Guidance 2 CFR 200.302 (b)(3) requires records to identify adequately the source and application of funds for federally funded activities. These records must be supported by source documentation. Context: We tested 100% of the employee benefits charged to the grant totaling $135,884 and noted that the source documentation did not support the total amount billed, the procedures identified overbilling of benefits in the amount of $7,356. Management was able to provide additional allowable costs to replace the overbilling. Questioned costs: None. Recommendations: We recommend management charge actual employee benefits incurred to the grant. We recommend management implement policies and procedures related to reconciliation processes each payroll to ensure that only supportable charges are billed to the grant. Views of the responsible officials and planned corrective actions: AJAC Directors have developed and implemented policies and procedures to appropriately allocate employee benefits. The new policies and procedures align the employee benefit expense with the wage allocations at the employee level.
Finding 2022-005: Coding of Indirect Expenses. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Costs Principals. Type of finding: Material Noncompliance, Material Weakness. Condition: Indirect costs were not coded in the accounting system to the individual grant. Effect or potential effect: Improper coding of indirect costs in the accounting system to individual grants may result in improper reporting and potential questioned costs. Cause: Lack of appropriate cost allocation policies and reconciliation procedures. Criteria: Uniform Guidance 2 CFR 200.302 (b)(3) requires records to identify adequately the source and application of funds for federally funded activities. Context: Indirect costs in the amount of $46,577 charged to the grant as indirect costs were not coded to the H1-B Job Training Grant class code in the accounting system. Questioned costs: None. Recommendations: We recommend management code indirect costs to individual grants. We recommend management implement a reconciliation process monthly to ensure that indirect costs charged to the grant are properly coded. Views of the responsible officials and planned corrective actions: AJAC has implemented monthly reconciliations to identify all appropriate indirect expenses specific to each grant or contract agreement. All indirect expenses identified as being reimbursable to a specific grant or contract will be reclassified in the accounting software to match the reimbursement request.
Finding 2022-006: Coding of Direct Expenses. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/ Cost Principles. Type of finding: Material Noncompliance, Material Weakness. Condition: Direct costs were not coded in the accounting system to the individual grant. Effect or potential effect: Improper coding of direct costs in the accounting system to individual grants may result in improper reporting and potential questioned costs. Cause: Lack of appropriate cost allocation policies and reconciliation procedures. Criteria: Uniform Guidance 2 CFR 200.302 (b)(3) requires records to identify adequately the source and application of funds for federally funded activities. Context: Unable to reconcile the direct costs reported in the books and records to the costs reported on the quarterly ETA – 9130 forms. Costs not specifically identified in the accounting records as H1- B Job Training Grant costs totaled $34,426. Questioned costs: None. Recommendations: We recommend management code direct costs to the individual grant. We recommend management implement a reconciliation process monthly to ensure that direct costs charged to the grant are properly coded. Views of the responsible officials and planned corrective actions: AJAC Directors will review all direct expenses related to each grant or contract agreement monthly and verify that they are appropriately recorded in the accounting software and tie to the reimbursement request.
Finding 2022-007: Financial Reporting Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/ Costs Principles, Period of Performance, Reporting. Type of finding: Material Noncompliance, Material Weakness. Condition: Subrecipient costs were not reported on the accrual basis on the quarterly ETA – 9130 forms. Effect or potential effect: Improper reporting results in inaccurate incomplete financial results. Cause: Management did not request and obtain subrecipient reports timely. Criteria: Uniform Guidance 2 CFR 200.302(b)(2) requires accurate, current, and complete disclosure of financial results. Context: Management did not request and receive quarterly financial reports from their subrecipient timely, which resulted in subrecipient expenditures of $4,002 being reported in the wrong quarter. Questioned costs: None. Recommendations: We recommend management report subrecipient expenses on the accrual basis. We recommend management implement policies and procedures to request and obtain subrecipient reports timely. Views of the responsible officials and planned corrective actions: Monthly financial statements will be delivered to AJAC Directors. AJAC Accounting Department will hold monthly close calls to collaborate with AJAC Directors to ensure accuracy of the financial records.
Finding 2022-008: Late Filing of Single Audit. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Reporting. Type of finding: Material Noncompliance, Material Weakness. Condition: The single audit was filed late. Effect or potential effect: Granting agencies and the general public are deprived of timely audit results. Cause: Books and records were not reconciled and made available for audit in a timely manner. Criteria: Uniform Guidance 2 CFR 200.507(c)(1) requires the audit to be completed and the reporting required to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Context: The completion of the audit was delayed due to improper policies and procedures, errors in the general ledger that were discovered during initial audit procedures, and unreconciled account balances. Questioned costs: None. Recommendations: We recommend management file their audit with the single audit clearing house timely. We recommend management implement policies and procedures to ensure the books and records are closed timely leaving enough time for the audit to be completed by the deadline. Views of the responsible officials and planned corrective actions: All federal grant revenue will be tracked with specific coding to ensure that AJAC Directors are aware of revenue accruals as they relate to the minimum thresholds for Single Audits and in a manner that allows for timely filing of future audits to the Single Audit Clearing House.
Finding 2022-009: Late Filing of Quarterly Reports. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Reporting. Type of finding: Material Weakness. Condition: ETA – 9130 quarterly reports for the quarters ended March 31, 2022 and June 30, 2022 were filed three days late. Effect or potential effect: Late filing could result in delayed funding and improper reporting. Cause: Lack of appropriate financial reporting policies. Criteria: The grant agreement requires all recipients to report quarterly financial data on the ETA – 9130 form no later than 45 calendar days after the end of each specified reporting quarter. Context: Management filed the March 31, 2022 and June 30, 2022 quarterly ETA – 9130 forms on May 18, 2022 and August 18, 2022 respectively. Questioned costs: None. Recommendations: We recommend management file ETA – 9130 forms timely. We recommend management implement financial reporting policies and procedures to ensure the timely filing of the ETA – 9130 forms. Views of the responsible officials and planned corrective actions: AJAC financial reporting policies and procedures have been updated to ensure timely filing of ETA-9130 form. Monthly reconciliations will help to ensure that all financial information is available for the ETA-9130 form ahead of submission deadlines.
Books and Records Not Kept on Accrual Basis of Accounting. Condition and context: Management did not keep AJAC's books and records on the accrual basis of accounting. Effect or potential effect: Total revenue was adjusted by approximately $762,000. Cause: General ledger account reconciliations were not performed and reviewed monthly. Criteria: Uniform Guidance 2 CFR 200 Subparts D and E requires accounting books and records to be kept on the accrual basis of accounting in accordance with generally accepted accounting principles (U.S. GAAP), which requires revenues be recognized when earned and expenses recorded when incurred. Recommendations: We recommend management keep the accounting books and records on the accrual basis of accounting. We recommend management review and revise current accounting policies and procedures to ensure that all general ledger accounts are reconciled and reviewed monthly. Responsible official's response: AJAC implemented monthly account reconciliations and review by AJAC Directors and Supervisors, this will ensure that the accounting books and records are kept on the accrual basis of accounting.
Internal Control Policies and Procedures. Condition and Context: AJAC did not have appropriate internal control policies and procedures to ensure accurate financial reporting, including in the areas of: 1) records management, 2) personnel policies, 3) financial reporting, 4) cash management, 5) cost allocation, and 6) formal audit and audit resolution systems. Effect or potential effect: Inaccuracies and delays in reporting of accounting information. Cause: Lack of appropriate cost allocation policies and procedures. Criteria: The Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Framework (Internal Control Framework) states management is responsible for maintaining and following appropriate policies and procedures to ensure accurate financial reporting. Recommendations: We recommend management review AJAC's current policies and procedures to ensure accurate financial reporting. We recommend that management provide regular monitoring and oversight of the internal control policies and procedures of the organization. Responsible official's response: Internal control policies and procedures were updated in order to address this finding. All financial reporting policies and procedures will be reviewed and updated on an annual basis by AJAC Directors and Supervisors.
Finding 2022-003: Internal Controls related to Compliance with Grant Agreement. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Cost Principles, Reporting. Type of finding: Material Weakness. Condition: AJAC did not have appropriate internal control policies and procedures to ensure compliance with grant and contract requirements. Effect or potential effect: Findings of noncompliance and inaccuracies and delays in reporting of accounting information. Cause: This condition was the result of lack of oversight and improper policies and procedures. Criteria: Uniform Guidance 2 CFR 200.303 requires that all non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the organization is managing the federal awards. Context: AJAC did not have appropriate internal control policies and procedures to ensure compliance with grants and contracts, including in the areas of: 1) priority service to veterans, 2) project modification process, 3) formal procurement standards, 4) records management, 5) personnel policies, 6) financial reporting, 7) cash management, 8) match policies, 9) cost allocation, and 10) formal audit and audit resolution systems. Questioned costs: None. Recommendations: We recommend management review AJAC’s current policies and procedures to ensure compliance. We recommend that management provide regular monitoring and oversight of the internal control policies and procedures of the organization. Views of the responsible officials and planned corrective actions: Internal control policies and procedures were updated in order to address this finding. All policies and procedures related to federal grant agreement compliance will be reviewed and updated on an annual basis by AJAC Directors and Supervisors.
Finding 2022-004: Allocation of Employee Benefit Expenses. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Cost Principles, Reporting. Type of finding: Material Noncompliance, Material Weakness. Condition: Employee benefit costs were charged to the grant using a fixed percentage rate that did not accurately reflect the actual cost of the employee benefits. Effect or potential effect: The fixed percentage rate used to charge employee benefits did not accurately reflect the actual cost incurred and resulted in incorrect reporting of expense to the federal agency. Cause: Lack of appropriate policies and reconciliation procedures. Criteria: Uniform Guidance 2 CFR 200.302 (b)(3) requires records to identify adequately the source and application of funds for federally funded activities. These records must be supported by source documentation. Context: We tested 100% of the employee benefits charged to the grant totaling $135,884 and noted that the source documentation did not support the total amount billed, the procedures identified overbilling of benefits in the amount of $7,356. Management was able to provide additional allowable costs to replace the overbilling. Questioned costs: None. Recommendations: We recommend management charge actual employee benefits incurred to the grant. We recommend management implement policies and procedures related to reconciliation processes each payroll to ensure that only supportable charges are billed to the grant. Views of the responsible officials and planned corrective actions: AJAC Directors have developed and implemented policies and procedures to appropriately allocate employee benefits. The new policies and procedures align the employee benefit expense with the wage allocations at the employee level.
Finding 2022-005: Coding of Indirect Expenses. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Costs Principals. Type of finding: Material Noncompliance, Material Weakness. Condition: Indirect costs were not coded in the accounting system to the individual grant. Effect or potential effect: Improper coding of indirect costs in the accounting system to individual grants may result in improper reporting and potential questioned costs. Cause: Lack of appropriate cost allocation policies and reconciliation procedures. Criteria: Uniform Guidance 2 CFR 200.302 (b)(3) requires records to identify adequately the source and application of funds for federally funded activities. Context: Indirect costs in the amount of $46,577 charged to the grant as indirect costs were not coded to the H1-B Job Training Grant class code in the accounting system. Questioned costs: None. Recommendations: We recommend management code indirect costs to individual grants. We recommend management implement a reconciliation process monthly to ensure that indirect costs charged to the grant are properly coded. Views of the responsible officials and planned corrective actions: AJAC has implemented monthly reconciliations to identify all appropriate indirect expenses specific to each grant or contract agreement. All indirect expenses identified as being reimbursable to a specific grant or contract will be reclassified in the accounting software to match the reimbursement request.
Finding 2022-006: Coding of Direct Expenses. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/ Cost Principles. Type of finding: Material Noncompliance, Material Weakness. Condition: Direct costs were not coded in the accounting system to the individual grant. Effect or potential effect: Improper coding of direct costs in the accounting system to individual grants may result in improper reporting and potential questioned costs. Cause: Lack of appropriate cost allocation policies and reconciliation procedures. Criteria: Uniform Guidance 2 CFR 200.302 (b)(3) requires records to identify adequately the source and application of funds for federally funded activities. Context: Unable to reconcile the direct costs reported in the books and records to the costs reported on the quarterly ETA – 9130 forms. Costs not specifically identified in the accounting records as H1- B Job Training Grant costs totaled $34,426. Questioned costs: None. Recommendations: We recommend management code direct costs to the individual grant. We recommend management implement a reconciliation process monthly to ensure that direct costs charged to the grant are properly coded. Views of the responsible officials and planned corrective actions: AJAC Directors will review all direct expenses related to each grant or contract agreement monthly and verify that they are appropriately recorded in the accounting software and tie to the reimbursement request.
Finding 2022-007: Financial Reporting Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/ Costs Principles, Period of Performance, Reporting. Type of finding: Material Noncompliance, Material Weakness. Condition: Subrecipient costs were not reported on the accrual basis on the quarterly ETA – 9130 forms. Effect or potential effect: Improper reporting results in inaccurate incomplete financial results. Cause: Management did not request and obtain subrecipient reports timely. Criteria: Uniform Guidance 2 CFR 200.302(b)(2) requires accurate, current, and complete disclosure of financial results. Context: Management did not request and receive quarterly financial reports from their subrecipient timely, which resulted in subrecipient expenditures of $4,002 being reported in the wrong quarter. Questioned costs: None. Recommendations: We recommend management report subrecipient expenses on the accrual basis. We recommend management implement policies and procedures to request and obtain subrecipient reports timely. Views of the responsible officials and planned corrective actions: Monthly financial statements will be delivered to AJAC Directors. AJAC Accounting Department will hold monthly close calls to collaborate with AJAC Directors to ensure accuracy of the financial records.
Finding 2022-008: Late Filing of Single Audit. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Reporting. Type of finding: Material Noncompliance, Material Weakness. Condition: The single audit was filed late. Effect or potential effect: Granting agencies and the general public are deprived of timely audit results. Cause: Books and records were not reconciled and made available for audit in a timely manner. Criteria: Uniform Guidance 2 CFR 200.507(c)(1) requires the audit to be completed and the reporting required to be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Context: The completion of the audit was delayed due to improper policies and procedures, errors in the general ledger that were discovered during initial audit procedures, and unreconciled account balances. Questioned costs: None. Recommendations: We recommend management file their audit with the single audit clearing house timely. We recommend management implement policies and procedures to ensure the books and records are closed timely leaving enough time for the audit to be completed by the deadline. Views of the responsible officials and planned corrective actions: All federal grant revenue will be tracked with specific coding to ensure that AJAC Directors are aware of revenue accruals as they relate to the minimum thresholds for Single Audits and in a manner that allows for timely filing of future audits to the Single Audit Clearing House.
Finding 2022-009: Late Filing of Quarterly Reports. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Reporting. Type of finding: Material Weakness. Condition: ETA – 9130 quarterly reports for the quarters ended March 31, 2022 and June 30, 2022 were filed three days late. Effect or potential effect: Late filing could result in delayed funding and improper reporting. Cause: Lack of appropriate financial reporting policies. Criteria: The grant agreement requires all recipients to report quarterly financial data on the ETA – 9130 form no later than 45 calendar days after the end of each specified reporting quarter. Context: Management filed the March 31, 2022 and June 30, 2022 quarterly ETA – 9130 forms on May 18, 2022 and August 18, 2022 respectively. Questioned costs: None. Recommendations: We recommend management file ETA – 9130 forms timely. We recommend management implement financial reporting policies and procedures to ensure the timely filing of the ETA – 9130 forms. Views of the responsible officials and planned corrective actions: AJAC financial reporting policies and procedures have been updated to ensure timely filing of ETA-9130 form. Monthly reconciliations will help to ensure that all financial information is available for the ETA-9130 form ahead of submission deadlines.