Audit 350805

Agency: Employment and Training Administration Office of Grants Management ALN: 17.289 Federal Award Identification Number: 23A60C9000032-01-00 Criteria: According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 200.213, non-federal entities are prohibited from contracting with or making subawards to parties that are suspended or debarred. The non-federal entity must verify that the contractor or subrecipient is not suspended or debarred through the System for Award Management (SAM), which includes reviewing the Excluded Parties List System (EPLS), or by collecting a certification from the entity. In addition, the Entity must conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. Condition and Context: The Entity failed to perform the required search for suspension and debarment in SAM for the two contractors tested and did not conduct a full and open competition for the services provided prior to awarding a contract under the federal program. The search should have been performed to ensure that the contractor was not suspended or debarred. Cause: The Entity has a procurement policy. However, the Entity did not follow that policy related to these two contractors. Repeat Finding: No Recommendation: We recommend that the Entity implement and adhere to a strict protocol for verifying suspension and debarment status and conduct an open and competitive bidding process prior to awarding any contracts or subawards under federal programs. We also recommend that suspension and debarment be included in the Entity’s procurement policy. In addition, the Entity should maintain documentation of the results of the searches, and the competitive bidding process and results to be in compliance. Views of Responsible Officials and Planned Corrective Action: See attached corrective action plan. Questioned Costs: None

Agency: Employment and Training Administration Office of Grants Management ALN: 17.289 Federal Award Identification Number: 23A60C9000032-01-00   Criteria: Under the Committee of Sponsoring Organization framework, control activities are established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out. Segregation of duties is typically built into the selection and development of control activities. According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 200.327 and 200.328, recipients of federal awards are required to submit performance and financial reports by the due dates specified in the terms and conditions of the federal awards. Context and Condition: There was an overall lack of segregation of duties surrounding the preparation and submission of grant reimbursement requests as the VP of Finance performed this function himself with no review and approval. Cause: The Entity failed to establish a set of internal control procedures to ensure segregation of duties and an appropriate review and approval process. Effect: There was a lack of adequate review and oversight over grant reporting. Repeat Finding: No Recommendation: We recommend that the Entity establish internal control procedures that incorporate segregation of duties and add a level of review and approval for grant reporting. Views of Responsible Officials and Planned Corrective Action: See attached corrective action plan. Questioned Costs: None

Agency: Employment and Training Administration Office of Grants Management ALN: 17.289 Federal Award Identification Number: 23A60C9000032-01-00 Criteria: According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 200.213, non-federal entities are prohibited from contracting with or making subawards to parties that are suspended or debarred. The non-federal entity must verify that the contractor or subrecipient is not suspended or debarred through the System for Award Management (SAM), which includes reviewing the Excluded Parties List System (EPLS), or by collecting a certification from the entity. In addition, the Entity must conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. Condition and Context: The Entity failed to perform the required search for suspension and debarment in SAM for the two contractors tested and did not conduct a full and open competition for the services provided prior to awarding a contract under the federal program. The search should have been performed to ensure that the contractor was not suspended or debarred. Cause: The Entity has a procurement policy. However, the Entity did not follow that policy related to these two contractors. Repeat Finding: No Recommendation: We recommend that the Entity implement and adhere to a strict protocol for verifying suspension and debarment status and conduct an open and competitive bidding process prior to awarding any contracts or subawards under federal programs. We also recommend that suspension and debarment be included in the Entity’s procurement policy. In addition, the Entity should maintain documentation of the results of the searches, and the competitive bidding process and results to be in compliance. Views of Responsible Officials and Planned Corrective Action: See attached corrective action plan. Questioned Costs: None

Agency: Employment and Training Administration Office of Grants Management ALN: 17.289 Federal Award Identification Number: 23A60C9000032-01-00   Criteria: Under the Committee of Sponsoring Organization framework, control activities are established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out. Segregation of duties is typically built into the selection and development of control activities. According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 200.327 and 200.328, recipients of federal awards are required to submit performance and financial reports by the due dates specified in the terms and conditions of the federal awards. Context and Condition: There was an overall lack of segregation of duties surrounding the preparation and submission of grant reimbursement requests as the VP of Finance performed this function himself with no review and approval. Cause: The Entity failed to establish a set of internal control procedures to ensure segregation of duties and an appropriate review and approval process. Effect: There was a lack of adequate review and oversight over grant reporting. Repeat Finding: No Recommendation: We recommend that the Entity establish internal control procedures that incorporate segregation of duties and add a level of review and approval for grant reporting. Views of Responsible Officials and Planned Corrective Action: See attached corrective action plan. Questioned Costs: None