Audit 336212

2024-003 SUBRECIPIENT MONITORING – WOIA Federal agency: U.S. Department of Labor Federal Program Title & Assistance Listing Number: Workforce Investment Act Cluster - 17.258, 17.259, 17.578 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring to such an extent that the Department has a modified opinion on this federal grant compliance area. The Department is currently behind on performing monitoring controls such as quarterly desk reviews, annual on-site evaluations, and remote reviewing and testing of cost documentation. The Department has not completed fiscal or programmatic monitoring relating to Program Year 2023-2024 activity for any of its subrecipients. Due to staffing vacancies at the beginning of the fiscal year, as of January 2024, the Department had fallen approximately 2 years behind. By fiscal year-end for 2024, they had just completed Program Year 2022-2023 monitoring, and are now beginning the next Program Year. This program of the Department lacked evidence that sufficient risk assessments of subrecipients were performed that would allow the Department to identify any potential deficiencies that would require follow-up. The Department asserted that risk assessments had been included as attachments to the subgrant agreements, although these were not provided to us. These attachments were intended to be self-assessments, rather than being performed by the Department itself. There was no provided evidence of Department scoring or performing an independent evaluation of these. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for federal grant noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. This condition has caused the Department’s audit opinion over this grant’s compliance area to be modified. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.

2024-003 SUBRECIPIENT MONITORING – WOIA Federal agency: U.S. Department of Labor Federal Program Title & Assistance Listing Number: Workforce Investment Act Cluster - 17.258, 17.259, 17.578 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring to such an extent that the Department has a modified opinion on this federal grant compliance area. The Department is currently behind on performing monitoring controls such as quarterly desk reviews, annual on-site evaluations, and remote reviewing and testing of cost documentation. The Department has not completed fiscal or programmatic monitoring relating to Program Year 2023-2024 activity for any of its subrecipients. Due to staffing vacancies at the beginning of the fiscal year, as of January 2024, the Department had fallen approximately 2 years behind. By fiscal year-end for 2024, they had just completed Program Year 2022-2023 monitoring, and are now beginning the next Program Year. This program of the Department lacked evidence that sufficient risk assessments of subrecipients were performed that would allow the Department to identify any potential deficiencies that would require follow-up. The Department asserted that risk assessments had been included as attachments to the subgrant agreements, although these were not provided to us. These attachments were intended to be self-assessments, rather than being performed by the Department itself. There was no provided evidence of Department scoring or performing an independent evaluation of these. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for federal grant noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. This condition has caused the Department’s audit opinion over this grant’s compliance area to be modified. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.

2024-003 SUBRECIPIENT MONITORING – WOIA Federal agency: U.S. Department of Labor Federal Program Title & Assistance Listing Number: Workforce Investment Act Cluster - 17.258, 17.259, 17.578 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring to such an extent that the Department has a modified opinion on this federal grant compliance area. The Department is currently behind on performing monitoring controls such as quarterly desk reviews, annual on-site evaluations, and remote reviewing and testing of cost documentation. The Department has not completed fiscal or programmatic monitoring relating to Program Year 2023-2024 activity for any of its subrecipients. Due to staffing vacancies at the beginning of the fiscal year, as of January 2024, the Department had fallen approximately 2 years behind. By fiscal year-end for 2024, they had just completed Program Year 2022-2023 monitoring, and are now beginning the next Program Year. This program of the Department lacked evidence that sufficient risk assessments of subrecipients were performed that would allow the Department to identify any potential deficiencies that would require follow-up. The Department asserted that risk assessments had been included as attachments to the subgrant agreements, although these were not provided to us. These attachments were intended to be self-assessments, rather than being performed by the Department itself. There was no provided evidence of Department scoring or performing an independent evaluation of these. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for federal grant noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. This condition has caused the Department’s audit opinion over this grant’s compliance area to be modified. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.

2024-004 SUBRECIPIENT MONITORING – AMERICORPS Federal agency: U.S. Corporation for National and Community Service Federal Program Title & Assistance Listing Number: AmeriCorps - 94.006 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance;Otherl Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring. The Department represented to us that annual site visits had been performed, but that there was no documentation related to those visits or the nature of the monitoring performed that could be provided as evidence. The extent of fiscal monitoring did not appear sufficient. There was no evidence of review of cost documentation for subrecipients who were not subject to heightened fiscal monitoring, other than summary-level reports and general ledger data. For subrecipients who were subject to heightened fiscal monitoring, one month of costs were selected for testing. The Department did not utilize an audit test sheet to record the results of these tests. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.

2024-003 SUBRECIPIENT MONITORING – WOIA Federal agency: U.S. Department of Labor Federal Program Title & Assistance Listing Number: Workforce Investment Act Cluster - 17.258, 17.259, 17.578 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring to such an extent that the Department has a modified opinion on this federal grant compliance area. The Department is currently behind on performing monitoring controls such as quarterly desk reviews, annual on-site evaluations, and remote reviewing and testing of cost documentation. The Department has not completed fiscal or programmatic monitoring relating to Program Year 2023-2024 activity for any of its subrecipients. Due to staffing vacancies at the beginning of the fiscal year, as of January 2024, the Department had fallen approximately 2 years behind. By fiscal year-end for 2024, they had just completed Program Year 2022-2023 monitoring, and are now beginning the next Program Year. This program of the Department lacked evidence that sufficient risk assessments of subrecipients were performed that would allow the Department to identify any potential deficiencies that would require follow-up. The Department asserted that risk assessments had been included as attachments to the subgrant agreements, although these were not provided to us. These attachments were intended to be self-assessments, rather than being performed by the Department itself. There was no provided evidence of Department scoring or performing an independent evaluation of these. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for federal grant noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. This condition has caused the Department’s audit opinion over this grant’s compliance area to be modified. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.

2024-003 SUBRECIPIENT MONITORING – WOIA Federal agency: U.S. Department of Labor Federal Program Title & Assistance Listing Number: Workforce Investment Act Cluster - 17.258, 17.259, 17.578 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring to such an extent that the Department has a modified opinion on this federal grant compliance area. The Department is currently behind on performing monitoring controls such as quarterly desk reviews, annual on-site evaluations, and remote reviewing and testing of cost documentation. The Department has not completed fiscal or programmatic monitoring relating to Program Year 2023-2024 activity for any of its subrecipients. Due to staffing vacancies at the beginning of the fiscal year, as of January 2024, the Department had fallen approximately 2 years behind. By fiscal year-end for 2024, they had just completed Program Year 2022-2023 monitoring, and are now beginning the next Program Year. This program of the Department lacked evidence that sufficient risk assessments of subrecipients were performed that would allow the Department to identify any potential deficiencies that would require follow-up. The Department asserted that risk assessments had been included as attachments to the subgrant agreements, although these were not provided to us. These attachments were intended to be self-assessments, rather than being performed by the Department itself. There was no provided evidence of Department scoring or performing an independent evaluation of these. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for federal grant noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. This condition has caused the Department’s audit opinion over this grant’s compliance area to be modified. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.

2024-003 SUBRECIPIENT MONITORING – WOIA Federal agency: U.S. Department of Labor Federal Program Title & Assistance Listing Number: Workforce Investment Act Cluster - 17.258, 17.259, 17.578 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring to such an extent that the Department has a modified opinion on this federal grant compliance area. The Department is currently behind on performing monitoring controls such as quarterly desk reviews, annual on-site evaluations, and remote reviewing and testing of cost documentation. The Department has not completed fiscal or programmatic monitoring relating to Program Year 2023-2024 activity for any of its subrecipients. Due to staffing vacancies at the beginning of the fiscal year, as of January 2024, the Department had fallen approximately 2 years behind. By fiscal year-end for 2024, they had just completed Program Year 2022-2023 monitoring, and are now beginning the next Program Year. This program of the Department lacked evidence that sufficient risk assessments of subrecipients were performed that would allow the Department to identify any potential deficiencies that would require follow-up. The Department asserted that risk assessments had been included as attachments to the subgrant agreements, although these were not provided to us. These attachments were intended to be self-assessments, rather than being performed by the Department itself. There was no provided evidence of Department scoring or performing an independent evaluation of these. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for federal grant noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. This condition has caused the Department’s audit opinion over this grant’s compliance area to be modified. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.

2024-004 SUBRECIPIENT MONITORING – AMERICORPS Federal agency: U.S. Corporation for National and Community Service Federal Program Title & Assistance Listing Number: AmeriCorps - 94.006 Award Period: Program Year 2023-2024 Type of Finding: Material Weakness in Internal Control over Compliance;Otherl Non-compliance Compliance Areas: Subrecipient Monitoring Questioned Costs: None Condition During our testing, we noted the Department did not have adequate internal controls in place to ensure compliance with subrecipient monitoring. The Department represented to us that annual site visits had been performed, but that there was no documentation related to those visits or the nature of the monitoring performed that could be provided as evidence. The extent of fiscal monitoring did not appear sufficient. There was no evidence of review of cost documentation for subrecipients who were not subject to heightened fiscal monitoring, other than summary-level reports and general ledger data. For subrecipients who were subject to heightened fiscal monitoring, one month of costs were selected for testing. The Department did not utilize an audit test sheet to record the results of these tests. Criteria §200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must 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. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521 Management Decision. Effect The lack of internal controls over this compliance requirement provides an opportunity for noncompliance at the subrecipient level. Potential costs outside the scope of work as well as overall effective project management at the subrecipient level. There is higher risk of material misstatement, fraud, noncompliance, or errors. Cause The Department has not established internal controls and procedures over financial grant management to ensure compliance with applicable compliance requirements. The Department has experienced staffing turnover during these time periods and training and monitoring is needed.