Audit 318179

Finding 2022-006 Internal Control and Compliance over Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population of one (1) subrecipient. • The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development • The County did not document their evaluation of each subrecipient’s risk of noncompliance Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-008. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-006 Internal Control and Compliance over Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population of one (1) subrecipient. • The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development • The County did not document their evaluation of each subrecipient’s risk of noncompliance Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-008. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-006 Internal Control and Compliance over Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population of one (1) subrecipient. • The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development • The County did not document their evaluation of each subrecipient’s risk of noncompliance Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-008. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-007 Internal Control and Compliance over Payroll Expenditures Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-010. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-007 Internal Control and Compliance over Payroll Expenditures Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-010. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-007 Internal Control and Compliance over Payroll Expenditures Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-010. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-006 Internal Control and Compliance over Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population of one (1) subrecipient. • The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development • The County did not document their evaluation of each subrecipient’s risk of noncompliance Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-008. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-006 Internal Control and Compliance over Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population of one (1) subrecipient. • The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development • The County did not document their evaluation of each subrecipient’s risk of noncompliance Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-008. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-006 Internal Control and Compliance over Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population of one (1) subrecipient. • The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development • The County did not document their evaluation of each subrecipient’s risk of noncompliance Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-008. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-007 Internal Control and Compliance over Payroll Expenditures Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-010. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-007 Internal Control and Compliance over Payroll Expenditures Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-010. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-007 Internal Control and Compliance over Payroll Expenditures Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-010. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): 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). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.