Department of Education and Passed through State of Iowa Department of Education
Federal Financial Assistance Listing #84.287, C14-SHIP, C15-SHIP, C16-SHIP, C17-SHIP, C18-SHIP, 7/1/2023 – 6/30/2024
Twenty-First Century Community Learning Centers Program
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Material Weakness in Internal Control over Compliance
Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
The Iowa Department of Education Guide to Program Budgets and Accounting for the 21st Century Community Learning Centers program provides that an organization participating in the program may expend no more than 8 percent of annual funding on general administration and indirect costs. Further, indirect costs are to be recovered only to the extent of direct costs incurred.
Condition: Through review of indirect costs charged to the federal awards, we noted the Organization charged an 8% administrative indirect cost rate to the federal awards, however, calculated the 8% on the budgeted grant award rather than on the actual direct costs incurred under the federal award for the first three quarters of the grant period.
Cause: The Organization was not aware that the indirect cost rate should be applied pro rata to the underlying direct costs prior to the completion of the prior year audit.
Effect: The Organization’s controls did not detect or correct the errors identified.
Questioned Costs: No questioned costs over $25,000.
Context: Two quarters out of four quarters of indirect costs charged to the federal awards were selected for testing, which accounted for $17,547 of $44,268 total indirect costs charged to the federal award.
Repeat Finding from Prior Year: Yes, Finding 2023-003
Recommendation: We acknowledge the Organization revised their procedures following the prior year audit. We recommend management continue to review procedures over the allocation of indirect costs to ensure indirect amounts charged to the program are based on actual underlying direct costs and that the total indirect allocation of general administration costs does not exceed the rate allowed by the federal program.
Views of Responsible Officials: Management is in agreement.
Department of Labor
Federal Financial Assistance Listing #17.270, YF-38599-22-60-A-19, 7/1/2023 – 6/30/2024
Reentry Employment Opportunities
Procurement, Suspension & Debarment
Material Weakness in Internal Control over Compliance and Noncompliance
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform to procurement standards in sections 200.317 through 200.327. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry.
Condition: The organization’s procurement policy did not contain all of the required procurement standards and contract provisions as required by Uniform Guidance. The organization entered into a covered transaction with a vendor before performing a review to ensure the vendor was not suspended or debarred.
Cause: The Organization was unaware of the missing items from the procurement standards and contract provisions. The Organization did not follow their formal procurement policy prior to entering into a covered transaction with a vendor to ensure that vendor was not suspended or debarred.
Effect: Lack of compliance with established internal control procedures may result in noncompliance with the program.
Questioned Costs: None reported.
Context: There was one contract subject to procurement, suspension and debarment during the year which was tested. The vendor was not included on the suspended or debarred list.
Repeat Finding from Prior Year: No
Recommendation: We recommend management review their procedures over procurement, suspension and debarment to ensure they align with Uniform Guidance requirements. The procedures should also be reviewed with those individuals charged with entering into contracts to ensure a complete understanding of all federal requirements.
Views of Responsible Officials: Management is in agreement.
Department of Labor
Federal Financial Assistance Listing #17.270, YF-38599-22-60-A-19, 7/1/2023 – 6/30/2024
Reentry Employment Opportunities
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.328 requires the auditee to submit financial reports as required by the federal award.
Section 12.l. of the grant agreement requires quarterly financial reports on the ETA-9130 Financial Report which notes all financial data is required to be reported cumulative from grant inception, through the end of each reporting period. Expenditure data is required to be reported on an accrual basis.
Condition: We identified that the 9130 financial reports were completed on the cash basis of accounting and were completed as of the date the report was submitted and not based on the specified quarterly reporting period. Additionally, documentation was not retained to support the numbers reported and there was no documented review or approval over the 9130 quarterly reports.
Cause: Documentation was not retained to support the amounts being reported on the 9130 quarterly reports. Additionally, there was no documented review and approval.
Effect: Without retaining documentation to support the amounts reported and to support oversight over the reporting process, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult.
Questioned Costs: None reported.
Context: In a statistical sample of four quarters, two quarters were selected for testing.
Repeat Finding from Prior Year: No
Recommendation: We recommend that management review the grant reporting requirements to ensure and understanding of the required reporting information. In addition, we suggest the Organization’s internal control procedures be reviewed and updated to include steps to retain the documentation which supports the information being reported to the federal government. Those procedures should also incorporate documentation of the review and approval of the quarterly reports prior to submission.
Views of Responsible Officials: Management is in agreement.
Department of Labor
Federal Financial Assistance Listing #17.270, YF-38599-22-60-A-19, 7/1/2023 – 6/30/2024
Reentry Employment Opportunities
Cash Management
Material Weakness in Internal Control over Compliance
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: There were two months identified in which the draw request amount for the Reentry Employment Opportunities program was inadvertently switched with a draw request for a different federal program. The expenditures for the Reentry Employment Opportunities program were incurred prior to the draw down request being completed.
Cause: The review and approval over the draw request did not identify the misclassification between the two grant programs.
Effect: The Organization’s controls did not timely detect the error.
Questioned Costs: None reported.
Context: A non-statistical sample of four out of twelve months were selected for testing. All draws submitted within the selected months were tested.
Repeat Finding from Prior Year: No
Recommendation: We acknowledge a review process is in place, however we recommend that management strengthen their controls surrounding the cash management process to ensure the review of funds being requested for reimbursement agree to the grant program supporting documentation.
Views of Responsible Officials: Management is in agreement.
Department of Justice
Federal Financial Assistance Listing #16.812, 15PJDP-22-GG-03256-SCAX and 15PBJA-22-GG-04601-SCAX, 7/1/2023 – 6/30/2024
Second Chance Act Reentry Initiative
Cash Management
Material Weakness in Internal Control over Compliance and Other Noncompliance for a Non-Major Program
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.305 states that recipients’ payment methods must minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Under Part 3, section C. of the Compliance supplement, for grants that are funded on a reimbursement basis, expenditures need to be incurred prior to the date of the reimbursement request.
Condition: There were two months out of twelve where the draw request amount for the Second Chance Act Reentry program was switched with a draw request for another federal program. The draw request amount exceeded the actual expenditures incurred for these two months.
Cause: The review and approval over the draw request did not identify the misclassification between the two grant programs.
Effect: The draw request amounts for the Second Chance Act Reentry program exceeded the actual expenditures incurred for the two months by $55,054.
Questioned Costs: $55,054.
Context: A non-statistical sample of four out of twelve months were initially selected for testing. All draws submitted within the selected months were ultimately tested.
Repeat Finding from Prior Year: No
Recommendation: We acknowledge a review process is in place, however we recommend that management strengthen their controls surrounding the cash management process to ensure the review of funds being requested for reimbursement agree to the grant program supporting documentation.
Views of Responsible Officials: Management is in agreement.
Department of Education and Passed through State of Iowa Department of Education
Federal Financial Assistance Listing #84.287, C14-SHIP, C15-SHIP, C16-SHIP, C17-SHIP, C18-SHIP, 7/1/2023 – 6/30/2024
Twenty-First Century Community Learning Centers Program
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Material Weakness in Internal Control over Compliance
Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
The Iowa Department of Education Guide to Program Budgets and Accounting for the 21st Century Community Learning Centers program provides that an organization participating in the program may expend no more than 8 percent of annual funding on general administration and indirect costs. Further, indirect costs are to be recovered only to the extent of direct costs incurred.
Condition: Through review of indirect costs charged to the federal awards, we noted the Organization charged an 8% administrative indirect cost rate to the federal awards, however, calculated the 8% on the budgeted grant award rather than on the actual direct costs incurred under the federal award for the first three quarters of the grant period.
Cause: The Organization was not aware that the indirect cost rate should be applied pro rata to the underlying direct costs prior to the completion of the prior year audit.
Effect: The Organization’s controls did not detect or correct the errors identified.
Questioned Costs: No questioned costs over $25,000.
Context: Two quarters out of four quarters of indirect costs charged to the federal awards were selected for testing, which accounted for $17,547 of $44,268 total indirect costs charged to the federal award.
Repeat Finding from Prior Year: Yes, Finding 2023-003
Recommendation: We acknowledge the Organization revised their procedures following the prior year audit. We recommend management continue to review procedures over the allocation of indirect costs to ensure indirect amounts charged to the program are based on actual underlying direct costs and that the total indirect allocation of general administration costs does not exceed the rate allowed by the federal program.
Views of Responsible Officials: Management is in agreement.
Department of Labor
Federal Financial Assistance Listing #17.270, YF-38599-22-60-A-19, 7/1/2023 – 6/30/2024
Reentry Employment Opportunities
Procurement, Suspension & Debarment
Material Weakness in Internal Control over Compliance and Noncompliance
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform to procurement standards in sections 200.317 through 200.327. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry.
Condition: The organization’s procurement policy did not contain all of the required procurement standards and contract provisions as required by Uniform Guidance. The organization entered into a covered transaction with a vendor before performing a review to ensure the vendor was not suspended or debarred.
Cause: The Organization was unaware of the missing items from the procurement standards and contract provisions. The Organization did not follow their formal procurement policy prior to entering into a covered transaction with a vendor to ensure that vendor was not suspended or debarred.
Effect: Lack of compliance with established internal control procedures may result in noncompliance with the program.
Questioned Costs: None reported.
Context: There was one contract subject to procurement, suspension and debarment during the year which was tested. The vendor was not included on the suspended or debarred list.
Repeat Finding from Prior Year: No
Recommendation: We recommend management review their procedures over procurement, suspension and debarment to ensure they align with Uniform Guidance requirements. The procedures should also be reviewed with those individuals charged with entering into contracts to ensure a complete understanding of all federal requirements.
Views of Responsible Officials: Management is in agreement.
Department of Labor
Federal Financial Assistance Listing #17.270, YF-38599-22-60-A-19, 7/1/2023 – 6/30/2024
Reentry Employment Opportunities
Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.328 requires the auditee to submit financial reports as required by the federal award.
Section 12.l. of the grant agreement requires quarterly financial reports on the ETA-9130 Financial Report which notes all financial data is required to be reported cumulative from grant inception, through the end of each reporting period. Expenditure data is required to be reported on an accrual basis.
Condition: We identified that the 9130 financial reports were completed on the cash basis of accounting and were completed as of the date the report was submitted and not based on the specified quarterly reporting period. Additionally, documentation was not retained to support the numbers reported and there was no documented review or approval over the 9130 quarterly reports.
Cause: Documentation was not retained to support the amounts being reported on the 9130 quarterly reports. Additionally, there was no documented review and approval.
Effect: Without retaining documentation to support the amounts reported and to support oversight over the reporting process, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult.
Questioned Costs: None reported.
Context: In a statistical sample of four quarters, two quarters were selected for testing.
Repeat Finding from Prior Year: No
Recommendation: We recommend that management review the grant reporting requirements to ensure and understanding of the required reporting information. In addition, we suggest the Organization’s internal control procedures be reviewed and updated to include steps to retain the documentation which supports the information being reported to the federal government. Those procedures should also incorporate documentation of the review and approval of the quarterly reports prior to submission.
Views of Responsible Officials: Management is in agreement.
Department of Labor
Federal Financial Assistance Listing #17.270, YF-38599-22-60-A-19, 7/1/2023 – 6/30/2024
Reentry Employment Opportunities
Cash Management
Material Weakness in Internal Control over Compliance
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: There were two months identified in which the draw request amount for the Reentry Employment Opportunities program was inadvertently switched with a draw request for a different federal program. The expenditures for the Reentry Employment Opportunities program were incurred prior to the draw down request being completed.
Cause: The review and approval over the draw request did not identify the misclassification between the two grant programs.
Effect: The Organization’s controls did not timely detect the error.
Questioned Costs: None reported.
Context: A non-statistical sample of four out of twelve months were selected for testing. All draws submitted within the selected months were tested.
Repeat Finding from Prior Year: No
Recommendation: We acknowledge a review process is in place, however we recommend that management strengthen their controls surrounding the cash management process to ensure the review of funds being requested for reimbursement agree to the grant program supporting documentation.
Views of Responsible Officials: Management is in agreement.
Department of Justice
Federal Financial Assistance Listing #16.812, 15PJDP-22-GG-03256-SCAX and 15PBJA-22-GG-04601-SCAX, 7/1/2023 – 6/30/2024
Second Chance Act Reentry Initiative
Cash Management
Material Weakness in Internal Control over Compliance and Other Noncompliance for a Non-Major Program
Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.305 states that recipients’ payment methods must minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Under Part 3, section C. of the Compliance supplement, for grants that are funded on a reimbursement basis, expenditures need to be incurred prior to the date of the reimbursement request.
Condition: There were two months out of twelve where the draw request amount for the Second Chance Act Reentry program was switched with a draw request for another federal program. The draw request amount exceeded the actual expenditures incurred for these two months.
Cause: The review and approval over the draw request did not identify the misclassification between the two grant programs.
Effect: The draw request amounts for the Second Chance Act Reentry program exceeded the actual expenditures incurred for the two months by $55,054.
Questioned Costs: $55,054.
Context: A non-statistical sample of four out of twelve months were initially selected for testing. All draws submitted within the selected months were ultimately tested.
Repeat Finding from Prior Year: No
Recommendation: We acknowledge a review process is in place, however we recommend that management strengthen their controls surrounding the cash management process to ensure the review of funds being requested for reimbursement agree to the grant program supporting documentation.
Views of Responsible Officials: Management is in agreement.