Title: NOTE 1 - BASIS OF PRESENTATION
Accounting Policies: A summary of the significant accounting policies used by the Department in the preparation of the Schedule follows:
a) The accompanying Schedule of Expenditures of Federal Awards is prepared from the Department's accounting records and is not intended to present the financial position or results of operations.
b) The financial transactions are recorded by the Department in accordance with the terms and conditions of the grant, which may not be consistent with generally accepted accounting principles in the United States of America.
c) Expenditures are recognized in the accounting period in which the liability is incurred, is measurable or when actually paid whichever occurs first.
De Minimis Rate Used: N
Rate Explanation: The Department has not elected to use the 10% de minimis indirect cost rate allowed under the §200.414 Indirect (F&A) costs of the Uniform Guidance.
The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grants activities of the Department and is presented on the modified accrual basis of accounting. Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the basic financial statements. The Schedule excludes the other agency, which is an organizational component of the Department, known as the Vocational Rehabilitation Administration, presented as governmental funds of the Department. The information in the Schedule is presented in accordance with the requirements of Uniform Guidance 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
State or local governments redistributions of federal awards to the Department known as "pass through awards", should be treated by the Department as though they were received directly from the federal government. The Uniform Guidance 2 CFR Part 200 requires the Schedule to include the name of the pass through entity, and the identifying number assigned to the pass through entity for the federal awards received. The Department did not pass through to subrecipients any portion of its awards.
Title: NOTE 3 - FEDERAL ASSISTANCE LISTING NUMBER
Accounting Policies: A summary of the significant accounting policies used by the Department in the preparation of the Schedule follows:
a) The accompanying Schedule of Expenditures of Federal Awards is prepared from the Department's accounting records and is not intended to present the financial position or results of operations.
b) The financial transactions are recorded by the Department in accordance with the terms and conditions of the grant, which may not be consistent with generally accepted accounting principles in the United States of America.
c) Expenditures are recognized in the accounting period in which the liability is incurred, is measurable or when actually paid whichever occurs first.
De Minimis Rate Used: N
Rate Explanation: The Department has not elected to use the 10% de minimis indirect cost rate allowed under the §200.414 Indirect (F&A) costs of the Uniform Guidance.
The Assistance Listing Number (ALN), formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all federal assistance award mechanisms, including federal grants and cooperative agreements. Assistance listings are detailed public descriptions of federal programs that provide grants, loans, scholarships, insurance, and other types of assistance awards. The Sam.gov assistance listing is the publicly available online database showing all available Federally funded programs.
A cluster of programs means federal programs with different ALN numbers that are defined as a cluster of programs, because they are closely related programs that share common requirements. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
The Schedule of Expenditures of Federal Awards includes the following clusters:
Cluster
Federal Program
Federal ALN
Employment Service
Employment Service/Wagner Peyser Funded Activities
17.207
Disable Veterans' Outreach program (DVOP) 17.801
Title: NOTE 4 - MAJOR FEDERAL PROGRAMS
Accounting Policies: A summary of the significant accounting policies used by the Department in the preparation of the Schedule follows:
a) The accompanying Schedule of Expenditures of Federal Awards is prepared from the Department's accounting records and is not intended to present the financial position or results of operations.
b) The financial transactions are recorded by the Department in accordance with the terms and conditions of the grant, which may not be consistent with generally accepted accounting principles in the United States of America.
c) Expenditures are recognized in the accounting period in which the liability is incurred, is measurable or when actually paid whichever occurs first.
De Minimis Rate Used: N
Rate Explanation: The Department has not elected to use the 10% de minimis indirect cost rate allowed under the §200.414 Indirect (F&A) costs of the Uniform Guidance.
Major programs are identified in the Summary of Auditors' Results Section of the Schedule of Findings and Questioned Costs.
Title: NOTE 5 - UNEMPLOYMENT INSURANCE
Accounting Policies: A summary of the significant accounting policies used by the Department in the preparation of the Schedule follows:
a) The accompanying Schedule of Expenditures of Federal Awards is prepared from the Department's accounting records and is not intended to present the financial position or results of operations.
b) The financial transactions are recorded by the Department in accordance with the terms and conditions of the grant, which may not be consistent with generally accepted accounting principles in the United States of America.
c) Expenditures are recognized in the accounting period in which the liability is incurred, is measurable or when actually paid whichever occurs first.
De Minimis Rate Used: N
Rate Explanation: The Department has not elected to use the 10% de minimis indirect cost rate allowed under the §200.414 Indirect (F&A) costs of the Uniform Guidance.
In accordance with the Department of Labor, Office of Inspector General instructions, the Department recorded State Regular Unemployment Compensation (UC) benefits under ALN No. 17.225, on the accompanying Schedule of Expenditures of Federal Awards. The individual State and Federal portions are as follows:
State Regular UC benefits $166,227,458
Federal UC benefits 2,938,151
Federal UC administrative costs 19,808,015
Total Benefits $188,973,624
Title: NOTE 7 - RECONCILIATION TO THE FUND FINANCIAL STATEMENTS
Accounting Policies: A summary of the significant accounting policies used by the Department in the preparation of the Schedule follows:
a) The accompanying Schedule of Expenditures of Federal Awards is prepared from the Department's accounting records and is not intended to present the financial position or results of operations.
b) The financial transactions are recorded by the Department in accordance with the terms and conditions of the grant, which may not be consistent with generally accepted accounting principles in the United States of America.
c) Expenditures are recognized in the accounting period in which the liability is incurred, is measurable or when actually paid whichever occurs first.
De Minimis Rate Used: N
Rate Explanation: The Department has not elected to use the 10% de minimis indirect cost rate allowed under the §200.414 Indirect (F&A) costs of the Uniform Guidance.
Expenditures of federal awards are reported in the Department's Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) Governmental Funds and the Statement of Revenues, Expenses and Changes in Net Position Enterprise Funds. A reconciliation of the total expenditures from the accompanying Schedule to the Fund Financial Statements is as follows:
Expenditures reported in the Statement of Revenues, Expenditures and Changes in Fund
Balances (Deficit) - Governmental Funds $ 188,156,967
Expenses reported in the Statement of Revenues, Expenses and Changes in Net
Net Position - Enterprise Funds 174,105,906
Total 362,262,873
Less Expenses reported in:
General Fund (11,355,028)
Work Opportunity Incentive Fund (16,942,507)
Vocational Rehabilitation Administration (86,366,839)
Other Funds (18,988,282)
Disability Insurance (5,089,046)
Drivers Insurance (2,832,218)
Amount reported in the Schedule of Expenditures of Federal Awards $ 220,688,953
Title: NOTE 8 - LATE ISSUANCE OF SINGLE AUDIT REPORTING PACKAGE
Accounting Policies: A summary of the significant accounting policies used by the Department in the preparation of the Schedule follows:
a) The accompanying Schedule of Expenditures of Federal Awards is prepared from the Department's accounting records and is not intended to present the financial position or results of operations.
b) The financial transactions are recorded by the Department in accordance with the terms and conditions of the grant, which may not be consistent with generally accepted accounting principles in the United States of America.
c) Expenditures are recognized in the accounting period in which the liability is incurred, is measurable or when actually paid whichever occurs first.
De Minimis Rate Used: N
Rate Explanation: The Department has not elected to use the 10% de minimis indirect cost rate allowed under the §200.414 Indirect (F&A) costs of the Uniform Guidance.
As described in finding 2023-010 in Section III of the Schedule of Findings and Questioned Costs, the Department was unable submit the Data Collection Form and Reporting Package to the Federal Audit Clearinghouse of fiscal year ending June 30, 2023, during the required period. The main reason for the delay was the Coronavirus Pandemic, known as COVID-19, which forced a worldwide outbreak causing, a government and business disruption through mandated and voluntary closings of multiple companies and governmental entities on the island. As further explained in Note 18 to the financial statements, the Pandemic delayed the operations of the government and the audit procedures. The Department developed a plan to continue providing its services to the community and comply with the federal grants’ requirements.