Allocable Cost
Criteria – The Uniform Guidance, Part 200.405(a), states “A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: is incurred specifically for the Federal award; benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.” Uniform Guidance, Part 200.405(a) states, “Direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis.”
Condition – The Department has established program codes to allocate costs to both Federal and non-Federal programs. The allocation of the expenditures charged to these program codes is based on a combination of square footage and actual time reported on Federal and non-Federal programs. Department policies require rates to be updated quarterly. Some rates were not updated quarterly during fiscal year 2024 affecting $892,043 for 1000 East Grand cost allocations.
Cause – The Department transitioned to a new payroll system and policies and procedures to identify time reporting requirements for staff and report capabilities were not in place to properly allocate costs. In addition, due to staff turnover, staff were not available to review rates and compare allocated costs to time entries.
Effect – Allocable costs could be charged to the incorrect program code, resulting in allocating costs incorrectly to all programs, including federal programs. The effect on individual programs is undeterminable.
Recommendation – The Department should follow policies and procedures and review the allocable rates used during the period and determine if corrective disbursement entries are needed for all programs, including federal programs.
Response and Corrective Action Planned – The Department will review its policies and procedures to determine how often cost rates should be updated to its cost allocation plan. IWD will be moving to an annual review, with quarterly updates only being made in the case of material changes or reorganizations – when and if they occur. If a material event does not occur, an annual review would suffice by the end of fiscal year 2025.
Conclusion – Response accepted.
Allocable Cost
Criteria – The Uniform Guidance, Part 200.405(a), states “A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: is incurred specifically for the Federal award; benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.” Uniform Guidance, Part 200.405(a) states, “Direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis.”
Condition – The Department has established program codes to allocate costs to both Federal and non-Federal programs. The allocation of the expenditures charged to these program codes is based on a combination of square footage and actual time reported on Federal and non-Federal programs. Department policies require rates to be updated quarterly. Some rates were not updated quarterly during fiscal year 2024 affecting $892,043 for 1000 East Grand cost allocations.
Cause – The Department transitioned to a new payroll system and policies and procedures to identify time reporting requirements for staff and report capabilities were not in place to properly allocate costs. In addition, due to staff turnover, staff were not available to review rates and compare allocated costs to time entries.
Effect – Allocable costs could be charged to the incorrect program code, resulting in allocating costs incorrectly to all programs, including federal programs. The effect on individual programs is undeterminable.
Recommendation – The Department should follow policies and procedures and review the allocable rates used during the period and determine if corrective disbursement entries are needed for all programs, including federal programs.
Response and Corrective Action Planned – The Department will review its policies and procedures to determine how often cost rates should be updated to its cost allocation plan. IWD will be moving to an annual review, with quarterly updates only being made in the case of material changes or reorganizations – when and if they occur. If a material event does not occur, an annual review would suffice by the end of fiscal year 2025.
Conclusion – Response accepted.
IRS 940 Match
Criteria – Uniform Guidance Compliance Supplement states, “States are required to annually certify for each taxpayer the total amount of contributions required to be paid under state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the FUTA (Federal Unemployment Tax Act) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer’s IRS 940 FUTA tax form.”
The Internal Revenue Service (IRS) sends the Department a secure file typically in October of each year following the prior calendar year. Taxes received for calendar year ending December 31, 2022, were received in October 2023. IWD must certify and respond to each Federal Employer Identification Number even if there is no discrepancy.
The Department is also required to send back to the IRS the Federal Non-Filers file. This file lists all employers that filed with the state but did not file an IRS 940 FUTA tax form. Both the Certification file and the Non-Filers file must be sent back to the Internal Revenue Service by January 31, 2024. The Certification file is used to assign discrepancies to field auditors to determine the disposition of the discrepancy identified. The Department’s policy is designed to review each individual case within 180 days.
Condition – For the secure file received in October 2023, 5 of 25 discrepancies were not resolved within the 180-day period, as required, and an additional 19 of 25 discrepancies have not been resolved. For the secure file received in October 2022, 1 of 17 discrepancies were not resolved within the 180-day period, as required, and an additional 16 of 17 discrepancies have not been resolved.
Cause – Due to continued turnover of experienced field audit staff and the hiring and training timeline of new staff, the 940 workflows were not able to be resolved within the 180-day period.
Effect – The Department did not have discrepancies resolved in a timely manner.
Recommendation – The Department should follow the established policies and procedures to ensure discrepancies are followed up within 180 days.
Response and Corrective Action Planned – The Bureau has a new Bureau Chief and Management along with several newly hired and trained Field audit staff. The Department will follow policies and procedures in place for fiscal year 2025. As of this response, the fiscal year 2025 file currently only has 23 open 940 discrepancies remaining and will have those resolved by April 2025.
Conclusion – Response accepted.
IRS 940 Match
Criteria – Uniform Guidance Compliance Supplement states, “States are required to annually certify for each taxpayer the total amount of contributions required to be paid under state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the FUTA (Federal Unemployment Tax Act) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer’s IRS 940 FUTA tax form.”
The Internal Revenue Service (IRS) sends the Department a secure file typically in October of each year following the prior calendar year. Taxes received for calendar year ending December 31, 2022, were received in October 2023. IWD must certify and respond to each Federal Employer Identification Number even if there is no discrepancy.
The Department is also required to send back to the IRS the Federal Non-Filers file. This file lists all employers that filed with the state but did not file an IRS 940 FUTA tax form. Both the Certification file and the Non-Filers file must be sent back to the Internal Revenue Service by January 31, 2024. The Certification file is used to assign discrepancies to field auditors to determine the disposition of the discrepancy identified. The Department’s policy is designed to review each individual case within 180 days.
Condition – For the secure file received in October 2023, 5 of 25 discrepancies were not resolved within the 180-day period, as required, and an additional 19 of 25 discrepancies have not been resolved. For the secure file received in October 2022, 1 of 17 discrepancies were not resolved within the 180-day period, as required, and an additional 16 of 17 discrepancies have not been resolved.
Cause – Due to continued turnover of experienced field audit staff and the hiring and training timeline of new staff, the 940 workflows were not able to be resolved within the 180-day period.
Effect – The Department did not have discrepancies resolved in a timely manner.
Recommendation – The Department should follow the established policies and procedures to ensure discrepancies are followed up within 180 days.
Response and Corrective Action Planned – The Bureau has a new Bureau Chief and Management along with several newly hired and trained Field audit staff. The Department will follow policies and procedures in place for fiscal year 2025. As of this response, the fiscal year 2025 file currently only has 23 open 940 discrepancies remaining and will have those resolved by April 2025.
Conclusion – Response accepted.
Cash Management Improvement Act
Criteria – Effective cash management procedures provide for minimizing the amount of time between the drawdown/request for federal funds and the disbursement of those funds by the Department. Effective cash management also minimizes the amount of state and other federal funds used to supplant programs until federal funds are received. Generally, a maximum of three days is considered acceptable between the receipt of federal funds and the disbursement of those funds.
Condition – A review of the Department’s records identified cash balances averaged approximately $25.8 million and were greater than a significant amount of approximately $7.9 million for the fiscal year.
Cause – Although procedures have been established to draw federal funds only in amounts sufficient to cover current needs, the Department did not review or update procedures to account for federal draws associated with pandemic related administrative programs and unemployment benefits.
Effect – Failure to follow procedures resulted in Department employees not detecting the error in the normal course of performing their assigned duties.
Recommendation – The Department should follow established procedures to ensure federal funds are drawn only in amounts sufficient to cover current needs and are disbursed in a timely manner without carrying excessive daily balances.
Response and Corrective Action Planned – The agency is currently having discussions with both Department of Labor, as well as with Department of Administrative Services to see if UI benefits would be able to be added as an exemption to the Treasury Stat agreement for CMIA requirements.
Conclusion: Response accepted.
Cash Management Improvement Act
Criteria – Effective cash management procedures provide for minimizing the amount of time between the drawdown/request for federal funds and the disbursement of those funds by the Department. Effective cash management also minimizes the amount of state and other federal funds used to supplant programs until federal funds are received. Generally, a maximum of three days is considered acceptable between the receipt of federal funds and the disbursement of those funds.
Condition – A review of the Department’s records identified cash balances averaged approximately $25.8 million and were greater than a significant amount of approximately $7.9 million for the fiscal year.
Cause – Although procedures have been established to draw federal funds only in amounts sufficient to cover current needs, the Department did not review or update procedures to account for federal draws associated with pandemic related administrative programs and unemployment benefits.
Effect – Failure to follow procedures resulted in Department employees not detecting the error in the normal course of performing their assigned duties.
Recommendation – The Department should follow established procedures to ensure federal funds are drawn only in amounts sufficient to cover current needs and are disbursed in a timely manner without carrying excessive daily balances.
Response and Corrective Action Planned – The agency is currently having discussions with both Department of Labor, as well as with Department of Administrative Services to see if UI benefits would be able to be added as an exemption to the Treasury Stat agreement for CMIA requirements.
Conclusion: Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award. The ETA 9050 report, “Time Lapse of All First Payments Except Workshare”, provides information on the time it takes, states to pay benefits to claimants for the first compensable week of unemployment. The ETA 9052 report, “Nonmonetary Determination Time Lapse Detection”, provides information on the time it takes, states to issue nonmonetary determinations from the date the issues are first detected by the agency.
The UI Reports Handbook No. 401 requires the reports to be submitted on the 20th of the month following the month to which the data relates.
Condition – Supporting documentation for the monthly reports was not retained.
Cause – Department procedures have not been established to retain supporting documentation for the data fields in the report.
Effect – The lack of supporting documentation increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the support for the preparation of the report is retained.
Response and Corrective Action Planned – The current UI mainframe system only allows for this data to be shown in summary form and cannot be obtained at the more detailed level. As modernization is set to go live in summer 2025, the new UI system will allow for this data to be obtained at a more detailed level, and then saved as support for these reports.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award. The ETA 9050 report, “Time Lapse of All First Payments Except Workshare”, provides information on the time it takes, states to pay benefits to claimants for the first compensable week of unemployment. The ETA 9052 report, “Nonmonetary Determination Time Lapse Detection”, provides information on the time it takes, states to issue nonmonetary determinations from the date the issues are first detected by the agency.
The UI Reports Handbook No. 401 requires the reports to be submitted on the 20th of the month following the month to which the data relates.
Condition – Supporting documentation for the monthly reports was not retained.
Cause – Department procedures have not been established to retain supporting documentation for the data fields in the report.
Effect – The lack of supporting documentation increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the support for the preparation of the report is retained.
Response and Corrective Action Planned – The current UI mainframe system only allows for this data to be shown in summary form and cannot be obtained at the more detailed level. As modernization is set to go live in summer 2025, the new UI system will allow for this data to be obtained at a more detailed level, and then saved as support for these reports.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2112 report, “UI Financial Transaction Summary”, is a monthly summary of transactions in a state unemployment fund which consists of the 8405 Clearing Account Unemployment Trust Fund (UTF) Account, and Benefit Payment Account. UI Reports Handbook No. 401 requires the report to be submitted to the Employment and Training Administration of the U.S. Department of Labor monthly, by the first day of the second month following the month of reference.
Condition – Short Time Compensation (STC) is an alternative to layoffs for employers experiencing a reduction in available work, STC allows employers to reduce the hours of work rather than laying off some employees. The Federal Employee Compensation Act (FECA) provides workers' compensation coverage for employment-related injuries and occupational diseases. The Department did not report Short Time Compensation and FECA benefit payments on the transaction summaries throughout the fiscal year. There were unexplained variances in fiscal year 2023 between the prior year ending balance and current year beginning balances, these variances were not resolved in fiscal year 2024. The Department’s UC Benefit payment account did not include FECA benefit draws and Unemployment Compensation for Ex-Servicemembers (UCX) benefit draws throughout the fiscal year. General ledgers were not maintained properly throughout fiscal year 2024. ETA 2112 reports did not match the monthly 8401 reports due to supporting documents not being updated timely.
In addition, balances reported on the June 2024 ETA 2112 report for the Benefit Payment Account column did not agree to support, the ETA 2112 figure for the beginning benefit payment account balance was overstated by $5,287,695 and the ending benefit payment account balance was overstated by $5,134,989.
The Department has indicated the ETA 2112 reports submitted during fiscal year 2024 were reviewed and approved; however, this review was not documented for two of twelve months.
Cause – The Department utilizes an external accounting system for the processing of Unemployment Insurance (UI) benefit payments to claimants. The benefit claimant system processes the claims, then communicates the information to the State’s accounting system, Iowa Advantage, for payment.
The benefit claimant system identifies benefit payments by State Unemployment and Federal Unemployment programs, including Federal Unemployment claims covered under various Acts enacted during the pandemic.
The Department has developed a process to reconcile benefit payments by type and in total between the Department’s benefit claimant system and Iowa Advantage daily to ensure benefit payments are accurately recorded for financial reporting purposes. Although the Department performed the reconciliations, variances were identified and remained uncorrected at the time of reporting for the ETA 2112 reports.
Effect – Incorrect supporting documentation, such as the ETA 8405 report and accounting ledgers, resulted in undetected reporting errors and misstatements and the lack of a documented review of these reports resulted in the errors being undetected and increases the risk for further undetected reporting errors or misstatements.
Recommendation – The Department should follow policies and procedures already established to ensure variances in the reconciliation process are investigated and corrected immediately. If errors are noted on the ETA 2112 reports after initial submission, the Department should amend the completed report to agree with the corrected supporting documentation.
The Department should establish policies and procedures to ensure the monthly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department will review with staff and retrain as necessary to follow existing policies and procedures to ensure variances identified during the year end reconciliation process are appropriately documented and reconciled to ending and beginning balances. In addition, management will review ETA 2112 reports for accuracy and to identify if an amended report should be filed.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2112 report, “UI Financial Transaction Summary”, is a monthly summary of transactions in a state unemployment fund which consists of the 8405 Clearing Account Unemployment Trust Fund (UTF) Account, and Benefit Payment Account. UI Reports Handbook No. 401 requires the report to be submitted to the Employment and Training Administration of the U.S. Department of Labor monthly, by the first day of the second month following the month of reference.
Condition – Short Time Compensation (STC) is an alternative to layoffs for employers experiencing a reduction in available work, STC allows employers to reduce the hours of work rather than laying off some employees. The Federal Employee Compensation Act (FECA) provides workers' compensation coverage for employment-related injuries and occupational diseases. The Department did not report Short Time Compensation and FECA benefit payments on the transaction summaries throughout the fiscal year. There were unexplained variances in fiscal year 2023 between the prior year ending balance and current year beginning balances, these variances were not resolved in fiscal year 2024. The Department’s UC Benefit payment account did not include FECA benefit draws and Unemployment Compensation for Ex-Servicemembers (UCX) benefit draws throughout the fiscal year. General ledgers were not maintained properly throughout fiscal year 2024. ETA 2112 reports did not match the monthly 8401 reports due to supporting documents not being updated timely.
In addition, balances reported on the June 2024 ETA 2112 report for the Benefit Payment Account column did not agree to support, the ETA 2112 figure for the beginning benefit payment account balance was overstated by $5,287,695 and the ending benefit payment account balance was overstated by $5,134,989.
The Department has indicated the ETA 2112 reports submitted during fiscal year 2024 were reviewed and approved; however, this review was not documented for two of twelve months.
Cause – The Department utilizes an external accounting system for the processing of Unemployment Insurance (UI) benefit payments to claimants. The benefit claimant system processes the claims, then communicates the information to the State’s accounting system, Iowa Advantage, for payment.
The benefit claimant system identifies benefit payments by State Unemployment and Federal Unemployment programs, including Federal Unemployment claims covered under various Acts enacted during the pandemic.
The Department has developed a process to reconcile benefit payments by type and in total between the Department’s benefit claimant system and Iowa Advantage daily to ensure benefit payments are accurately recorded for financial reporting purposes. Although the Department performed the reconciliations, variances were identified and remained uncorrected at the time of reporting for the ETA 2112 reports.
Effect – Incorrect supporting documentation, such as the ETA 8405 report and accounting ledgers, resulted in undetected reporting errors and misstatements and the lack of a documented review of these reports resulted in the errors being undetected and increases the risk for further undetected reporting errors or misstatements.
Recommendation – The Department should follow policies and procedures already established to ensure variances in the reconciliation process are investigated and corrected immediately. If errors are noted on the ETA 2112 reports after initial submission, the Department should amend the completed report to agree with the corrected supporting documentation.
The Department should establish policies and procedures to ensure the monthly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department will review with staff and retrain as necessary to follow existing policies and procedures to ensure variances identified during the year end reconciliation process are appropriately documented and reconciled to ending and beginning balances. In addition, management will review ETA 2112 reports for accuracy and to identify if an amended report should be filed.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2208A report, “Quarterly UI Contingency Report”, provides information on the number of staff years worked and paid for various UI program categories, and provides the basis for determining above-base entitlements. UI Reports Handbook No. 336 requires the report to be submitted electronically for each calendar quarter to the Employment and Training Administration of the U.S. Department of Labor within 30 days after the end of the reporting quarter to which it relates.
Condition – Three of four quarterly reports were submitted between one and twenty-four days late. In addition, the Department has stated the reports were reviewed and approved; however, this review was not documented for two out of four quarterly reports.
Cause – Turnover of Financial leadership resulted in lack of independent review and approvals required for filing.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements. In addition, the lack of established policies and procedures resulted in the late submission of the three reports.
Recommendation – The Department should establish policies and procedures to ensure reports are submitted timely in accordance with UI Reports Handbook. The policies established should also ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – During fiscal year 2024, Iowa Workforce Development was without a CFO and Deputy CFO for a majority of the year. Once a CFO and Deputy were onboarded, these reviews began as required by internal policies and procedures.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2208A report, “Quarterly UI Contingency Report”, provides information on the number of staff years worked and paid for various UI program categories, and provides the basis for determining above-base entitlements. UI Reports Handbook No. 336 requires the report to be submitted electronically for each calendar quarter to the Employment and Training Administration of the U.S. Department of Labor within 30 days after the end of the reporting quarter to which it relates.
Condition – Three of four quarterly reports were submitted between one and twenty-four days late. In addition, the Department has stated the reports were reviewed and approved; however, this review was not documented for two out of four quarterly reports.
Cause – Turnover of Financial leadership resulted in lack of independent review and approvals required for filing.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements. In addition, the lack of established policies and procedures resulted in the late submission of the three reports.
Recommendation – The Department should establish policies and procedures to ensure reports are submitted timely in accordance with UI Reports Handbook. The policies established should also ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – During fiscal year 2024, Iowa Workforce Development was without a CFO and Deputy CFO for a majority of the year. Once a CFO and Deputy were onboarded, these reviews began as required by internal policies and procedures.
Conclusion – Response accepted.
Benefit Accuracy Measurement (BAM) Cases
Criteria – Benefit Accuracy Measurement was designed to determine the accuracy of paid and denied claims in the unemployment insurance program. BAM investigators reconstruct the Unemployment insurance claims process for samples of weekly payments and denied claims. Once investigations are complete, states are required to submit their findings to the Office of Unemployment Insurance database. Cases are to be reviewed timely. State agencies must complete 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. This is 120 days after the end of the Payment Integrity Information Act year end for June 30th.
Condition – Management decided to close cases if they were over 150 days old so that the Quality Control Department could focus on current cases. However, Workforce Development did not have written instruction from the Department of Labor to close these cases and was denied relief by the Department of Labor when requested. For the year ended June 30, 2024, Workforce Development closed 75.42% of paid cases. In addition, out of the 40 cases selected for testing, 11 were missing at least one of the required documents.
Cause – The BAM team was pulled off BAM cases during the pandemic to assist claimants in getting UI benefits. After the pandemic, the Department had a complete turnover in BAM staff with several retirements and promotions to other units.
Effect – The lack of required documents and timely review increases the risk for undetected claim errors.
Recommendation – The Department should establish policies and procedures to ensure 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. The Department should also establish policies and procedures to ensure all required documents are retained.
Response and Corrective Action Planned – Iowa has been working with our region five UI program specialist at Department of Labor and other region five states to set goals and make major changes to our processes. Iowa BAM team as of February 1, 2025, is now paperless. This will reduce the amount of time printing, scanning and manually reviewing cases. We will have seven BAM Auditors at this point with one retiring in March. This position has already been posted to refill. Additionally, we still have part-time help from previous BAM Auditors who are still employed in the Unemployment Division.
As stated above we have gone paperless. The amount of time spent printing each case, organizing etc. was extraordinary. We have also updated all documents, and they are located in a central location for use by the team. We will meet with BAM Auditors on a weekly basis (done by Workforce Program Coordinator) to keep Auditors on track and to assist them with any case issue. They will also self-report on case progress weekly so they can be assisted in the event the timeline is in danger of not being met. The Quality Control Manager will send weekly progress updates to the Bureau Chief on each person’s case management workload in addition to meeting with each Auditor.
Conclusion – Response accepted.
Benefit Accuracy Measurement (BAM) Cases
Criteria – Benefit Accuracy Measurement was designed to determine the accuracy of paid and denied claims in the unemployment insurance program. BAM investigators reconstruct the Unemployment insurance claims process for samples of weekly payments and denied claims. Once investigations are complete, states are required to submit their findings to the Office of Unemployment Insurance database. Cases are to be reviewed timely. State agencies must complete 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. This is 120 days after the end of the Payment Integrity Information Act year end for June 30th.
Condition – Management decided to close cases if they were over 150 days old so that the Quality Control Department could focus on current cases. However, Workforce Development did not have written instruction from the Department of Labor to close these cases and was denied relief by the Department of Labor when requested. For the year ended June 30, 2024, Workforce Development closed 75.42% of paid cases. In addition, out of the 40 cases selected for testing, 11 were missing at least one of the required documents.
Cause – The BAM team was pulled off BAM cases during the pandemic to assist claimants in getting UI benefits. After the pandemic, the Department had a complete turnover in BAM staff with several retirements and promotions to other units.
Effect – The lack of required documents and timely review increases the risk for undetected claim errors.
Recommendation – The Department should establish policies and procedures to ensure 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. The Department should also establish policies and procedures to ensure all required documents are retained.
Response and Corrective Action Planned – Iowa has been working with our region five UI program specialist at Department of Labor and other region five states to set goals and make major changes to our processes. Iowa BAM team as of February 1, 2025, is now paperless. This will reduce the amount of time printing, scanning and manually reviewing cases. We will have seven BAM Auditors at this point with one retiring in March. This position has already been posted to refill. Additionally, we still have part-time help from previous BAM Auditors who are still employed in the Unemployment Division.
As stated above we have gone paperless. The amount of time spent printing each case, organizing etc. was extraordinary. We have also updated all documents, and they are located in a central location for use by the team. We will meet with BAM Auditors on a weekly basis (done by Workforce Program Coordinator) to keep Auditors on track and to assist them with any case issue. They will also self-report on case progress weekly so they can be assisted in the event the timeline is in danger of not being met. The Quality Control Manager will send weekly progress updates to the Bureau Chief on each person’s case management workload in addition to meeting with each Auditor.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The ETA 9130, “Financial Status Report”, is the quarterly summary of program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. U.S. Department of Labor Employment and Training Administration Financial Report Instructions requires the report to be submitted electronically no later than 45 calendar days after each specified reporting period. A closeout report is required to be submitted no later than 90 calendar days after the grant end date.
Condition – Out of the 26 reports tested, two for program year 2024 for State and Local Youth programs were submitted and certified one day late.
For four of the 14 final reports, the total expenditures do not agree with the state’s accounting system. In total the reports were overstated $503,067, with ranges of an overstatement of $517,797 to an understatement of $14,730.
Cause – Due to staff turnover, the Department didn’t have enough adequate resources to ensure reconciliation of the state accounting system by program was performed, or ETA 9130 reports were independently reviewed, supporting records, and documentation was retained.
Effect – Reports submitted to the federal government could be inaccurate and not reflect actual program expenditures made by the Department. The Department is not in compliance with federal reporting deadlines.
Recommendation – The Department should establish policies and procedures to ensure expenditures are properly reported and a reconciliation to the state accounting system is performed. The Department should also establish policies and procedures to ensure reports are submitted timely.
Response and Corrective Action Planned – The Department has implemented a procedure to ensure ETA 9130 reports are filed timely and reconcile to supporting documentation. Moreover, all staff have access to a reporting calendar that flags reporting deadlines, so that way adequate reviews can be completed ahead of deadlines.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The ETA 9130, “Financial Status Report”, is the quarterly summary of program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. U.S. Department of Labor Employment and Training Administration Financial Report Instructions requires the report to be submitted electronically no later than 45 calendar days after each specified reporting period. A closeout report is required to be submitted no later than 90 calendar days after the grant end date.
Condition – Out of the 26 reports tested, two for program year 2024 for State and Local Youth programs were submitted and certified one day late.
For four of the 14 final reports, the total expenditures do not agree with the state’s accounting system. In total the reports were overstated $503,067, with ranges of an overstatement of $517,797 to an understatement of $14,730.
Cause – Due to staff turnover, the Department didn’t have enough adequate resources to ensure reconciliation of the state accounting system by program was performed, or ETA 9130 reports were independently reviewed, supporting records, and documentation was retained.
Effect – Reports submitted to the federal government could be inaccurate and not reflect actual program expenditures made by the Department. The Department is not in compliance with federal reporting deadlines.
Recommendation – The Department should establish policies and procedures to ensure expenditures are properly reported and a reconciliation to the state accounting system is performed. The Department should also establish policies and procedures to ensure reports are submitted timely.
Response and Corrective Action Planned – The Department has implemented a procedure to ensure ETA 9130 reports are filed timely and reconcile to supporting documentation. Moreover, all staff have access to a reporting calendar that flags reporting deadlines, so that way adequate reviews can be completed ahead of deadlines.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The ETA 9130, “Financial Status Report”, is the quarterly summary of program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. U.S. Department of Labor Employment and Training Administration Financial Report Instructions requires the report to be submitted electronically no later than 45 calendar days after each specified reporting period. A closeout report is required to be submitted no later than 90 calendar days after the grant end date.
Condition – Out of the 26 reports tested, two for program year 2024 for State and Local Youth programs were submitted and certified one day late.
For four of the 14 final reports, the total expenditures do not agree with the state’s accounting system. In total the reports were overstated $503,067, with ranges of an overstatement of $517,797 to an understatement of $14,730.
Cause – Due to staff turnover, the Department didn’t have enough adequate resources to ensure reconciliation of the state accounting system by program was performed, or ETA 9130 reports were independently reviewed, supporting records, and documentation was retained.
Effect – Reports submitted to the federal government could be inaccurate and not reflect actual program expenditures made by the Department. The Department is not in compliance with federal reporting deadlines.
Recommendation – The Department should establish policies and procedures to ensure expenditures are properly reported and a reconciliation to the state accounting system is performed. The Department should also establish policies and procedures to ensure reports are submitted timely.
Response and Corrective Action Planned – The Department has implemented a procedure to ensure ETA 9130 reports are filed timely and reconcile to supporting documentation. Moreover, all staff have access to a reporting calendar that flags reporting deadlines, so that way adequate reviews can be completed ahead of deadlines.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for WIOA Cluster subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – As of the beginning of fiscal year 2025, the Department has established the necessary policies and procedures surrounding FFATA reporting, and all necessary reporting has been completed for the current fiscal year.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for WIOA Cluster subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – As of the beginning of fiscal year 2025, the Department has established the necessary policies and procedures surrounding FFATA reporting, and all necessary reporting has been completed for the current fiscal year.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for WIOA Cluster subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – As of the beginning of fiscal year 2025, the Department has established the necessary policies and procedures surrounding FFATA reporting, and all necessary reporting has been completed for the current fiscal year.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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 identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Condition – For five out of six subawards, the Department did not include identification of whether the award is research and development or indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. These contracts also did not include the subrecipient’s Unique Entity Identifiers, nor the Federal Award Date.
Cause – At the time the tested agreements were established, the Department had not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients would result in grantee’s not being aware of their current indirect cost rate allowance, or if the award was for R&D purposes.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective late fiscal year 2024; new sub-awards and pass thru grant agreements utilize a cover sheet to ensure all required elements listed in
2 CFR 200.332 are clearly included in the subaward agreements.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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 identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Condition – For five out of six subawards, the Department did not include identification of whether the award is research and development or indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. These contracts also did not include the subrecipient’s Unique Entity Identifiers, nor the Federal Award Date.
Cause – At the time the tested agreements were established, the Department had not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients would result in grantee’s not being aware of their current indirect cost rate allowance, or if the award was for R&D purposes.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective late fiscal year 2024; new sub-awards and pass thru grant agreements utilize a cover sheet to ensure all required elements listed in
2 CFR 200.332 are clearly included in the subaward agreements.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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 identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Condition – For five out of six subawards, the Department did not include identification of whether the award is research and development or indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. These contracts also did not include the subrecipient’s Unique Entity Identifiers, nor the Federal Award Date.
Cause – At the time the tested agreements were established, the Department had not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients would result in grantee’s not being aware of their current indirect cost rate allowance, or if the award was for R&D purposes.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective late fiscal year 2024; new sub-awards and pass thru grant agreements utilize a cover sheet to ensure all required elements listed in
2 CFR 200.332 are clearly included in the subaward agreements.
Conclusion – Response accepted.
Subrecipient Monitoring
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance further states, “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program-related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Iowa Workforce Development’s written procedures regarding subrecipient monitoring related to WIOA onsite monitoring read, in part, as follows: “Iowa Workforce Development will issue a monitoring report to the Local Workforce Development Board within 30 business days from the conclusion of the monitoring review, summarizing the oversight activity results, which may include findings and required corrective actions, areas of concern and suggestions and promising practices.” Also stated, “Within 20 business days of the receipt of the corrective action plan, Iowa Workforce Development will review the plan and make an initial determination addressing the acceptability of the implemented or planned corrective actions to resolve any findings.”
Condition – The only region to have audit report monitoring performed in fiscal year 2024 included an audit report routing sheet noting a required follow-up. However, there was no documentation on the audit report routing sheet noting that the follow-up was performed.
For one out of six regions tested for program monitoring, the region did not receive their initial monitoring report within 30 days after the onsite review ended. For three out of six regions tested, the regions did not receive an initial determination letter from the Department within 20 days of submitting their corrective action plan.
Cause – The Department has not adhered to established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). Also, the Department has not adhered to established policies and procedures to ensure all required aspects of the WIOA Program Monitoring Letters are followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department is not in compliance with their written subrecipient monitoring policies.
Recommendation – The Department should review established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department should also establish policies and procedures to ensure compliance with their written subrecipient monitoring policies and either ensure established policies and procedures are followed or update their written subrecipient monitoring policies
Response and Corrective Action Planned – The Department established policies and procedures to perform financial subrecipient monitoring for subawards related to WIOA and began that process in May 2023. This finding centers on the timing of monitoring reports and determination letters. While not all monitoring reports and/or determination letters were issued timely per the policy, all local areas were notified if/when a report or determination letter could be expected to be sent after the established time frames in state policy. This is not because monitoring was not complete, but rather, to ensure comprehensive and effective monitoring reports and determination letters were issued, demonstrating Iowa Workforce Development’s commitment to thorough and effective monitoring of its subrecipients. The Department is also enhancing its fiscal review process starting with funding requests from sub-recipients and partnering with WIOA Title I program staff to identify areas of risk. Monitoring will continue to be performed to ensure compliance with WIOA and Uniform Guidance, Part 200.332 and Part 200.501(h).
Conclusion – Response accepted.
Subrecipient Monitoring
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance further states, “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program-related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Iowa Workforce Development’s written procedures regarding subrecipient monitoring related to WIOA onsite monitoring read, in part, as follows: “Iowa Workforce Development will issue a monitoring report to the Local Workforce Development Board within 30 business days from the conclusion of the monitoring review, summarizing the oversight activity results, which may include findings and required corrective actions, areas of concern and suggestions and promising practices.” Also stated, “Within 20 business days of the receipt of the corrective action plan, Iowa Workforce Development will review the plan and make an initial determination addressing the acceptability of the implemented or planned corrective actions to resolve any findings.”
Condition – The only region to have audit report monitoring performed in fiscal year 2024 included an audit report routing sheet noting a required follow-up. However, there was no documentation on the audit report routing sheet noting that the follow-up was performed.
For one out of six regions tested for program monitoring, the region did not receive their initial monitoring report within 30 days after the onsite review ended. For three out of six regions tested, the regions did not receive an initial determination letter from the Department within 20 days of submitting their corrective action plan.
Cause – The Department has not adhered to established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). Also, the Department has not adhered to established policies and procedures to ensure all required aspects of the WIOA Program Monitoring Letters are followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department is not in compliance with their written subrecipient monitoring policies.
Recommendation – The Department should review established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department should also establish policies and procedures to ensure compliance with their written subrecipient monitoring policies and either ensure established policies and procedures are followed or update their written subrecipient monitoring policies
Response and Corrective Action Planned – The Department established policies and procedures to perform financial subrecipient monitoring for subawards related to WIOA and began that process in May 2023. This finding centers on the timing of monitoring reports and determination letters. While not all monitoring reports and/or determination letters were issued timely per the policy, all local areas were notified if/when a report or determination letter could be expected to be sent after the established time frames in state policy. This is not because monitoring was not complete, but rather, to ensure comprehensive and effective monitoring reports and determination letters were issued, demonstrating Iowa Workforce Development’s commitment to thorough and effective monitoring of its subrecipients. The Department is also enhancing its fiscal review process starting with funding requests from sub-recipients and partnering with WIOA Title I program staff to identify areas of risk. Monitoring will continue to be performed to ensure compliance with WIOA and Uniform Guidance, Part 200.332 and Part 200.501(h).
Conclusion – Response accepted.
Subrecipient Monitoring
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance further states, “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program-related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Iowa Workforce Development’s written procedures regarding subrecipient monitoring related to WIOA onsite monitoring read, in part, as follows: “Iowa Workforce Development will issue a monitoring report to the Local Workforce Development Board within 30 business days from the conclusion of the monitoring review, summarizing the oversight activity results, which may include findings and required corrective actions, areas of concern and suggestions and promising practices.” Also stated, “Within 20 business days of the receipt of the corrective action plan, Iowa Workforce Development will review the plan and make an initial determination addressing the acceptability of the implemented or planned corrective actions to resolve any findings.”
Condition – The only region to have audit report monitoring performed in fiscal year 2024 included an audit report routing sheet noting a required follow-up. However, there was no documentation on the audit report routing sheet noting that the follow-up was performed.
For one out of six regions tested for program monitoring, the region did not receive their initial monitoring report within 30 days after the onsite review ended. For three out of six regions tested, the regions did not receive an initial determination letter from the Department within 20 days of submitting their corrective action plan.
Cause – The Department has not adhered to established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). Also, the Department has not adhered to established policies and procedures to ensure all required aspects of the WIOA Program Monitoring Letters are followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department is not in compliance with their written subrecipient monitoring policies.
Recommendation – The Department should review established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department should also establish policies and procedures to ensure compliance with their written subrecipient monitoring policies and either ensure established policies and procedures are followed or update their written subrecipient monitoring policies
Response and Corrective Action Planned – The Department established policies and procedures to perform financial subrecipient monitoring for subawards related to WIOA and began that process in May 2023. This finding centers on the timing of monitoring reports and determination letters. While not all monitoring reports and/or determination letters were issued timely per the policy, all local areas were notified if/when a report or determination letter could be expected to be sent after the established time frames in state policy. This is not because monitoring was not complete, but rather, to ensure comprehensive and effective monitoring reports and determination letters were issued, demonstrating Iowa Workforce Development’s commitment to thorough and effective monitoring of its subrecipients. The Department is also enhancing its fiscal review process starting with funding requests from sub-recipients and partnering with WIOA Title I program staff to identify areas of risk. Monitoring will continue to be performed to ensure compliance with WIOA and Uniform Guidance, Part 200.332 and Part 200.501(h).
Conclusion – Response accepted.
Subrecipient Monitoring Questionable Cost- Children and Families of Iowa
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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, 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 Part 200.521.”
The Uniform Guidance further states: “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.
In addition, Uniform Guidance, Part 200.501(h) states in part, “the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients.” and “Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits.”
Condition – Based on our observations, discussions with the Department officials, and the procedures we performed, we determined proper subrecipient monitoring was not performed for the period of our review, April 1, 2015, through May 31, 2022. According to the Department officials we spoke with, the fiscal agent changed several times during Ms. Spragur-Tate’s employment and fiscal monitoring did not happen.
Cause – The Department has not established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h).
Recommendation – The Department should establish policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Response and Corrective Action Planned – To begin, Iowa Workforce Development did conduct monitoring of subrecipient activities throughout the relevant period. However, the sophistication and intent behind the fraud, coupled with structural weaknesses in the oversight processes, allowed these actions to persist undetected. While the monitoring in place adhered to Federal standards, the circumstances demonstrated the need for a more targeted approach to identify potential vulnerabilities proactively, especially when dealing with sophisticated methods employed by fraudsters. Second, the findings in this report clearly highlight a significant breakdown in internal controls that allowed fraudulent activities to occur over an extended period of time. The misuse of $436,179.92 in program funds, including $321,520.32 in questioned costs under the Workforce Innovation and Opportunity Act (WIOA), underscores the exploitation of these weaknesses by an individual who acted with intent to defraud. When an individual willfully circumvents internal controls at multiple levels, including fiscal agents, the subrecipient organization, and the external auditors – this highlights the importance of strong internal controls, and risk assessments by all parties involved. Effective oversight requires reciprocal diligence by all stakeholders, and in this instance, the extended period during which irregularities occurred suggests an opportunity for more proactive intervention at all levels.
Moreover, Iowa Workforce Development has already initiated measures to address the issues raised within this report, including:
• Enhanced Monitoring Protocols: Revising and expanding monitoring practices to include more frequent on-site reviews, enhanced financial documentation requirements, and stricter oversight of subrecipient compliance with state & federal statutes.
• Training and Capacity Building: Conducting mandatory training sessions for Iowa Workforce Development staff and providing necessary technical assistance to subrecipients to ensure a thorough understanding of grant management requirements.
• Auditor Accountability: Collaborating and creating a more transparent relationship with the state auditor’s office to establish clearer expectations for identifying and reporting financial discrepancies promptly, as well as discussing potential issues that arise more frequently.
Iowa Workforce Development remains committed to continue collaborating with all stakeholders – at the Federal and State level – to ensure situations such as this do not occur hereafter.
Conclusion – Response accepted.
Subrecipient Monitoring Questionable Cost- Children and Families of Iowa
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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, 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 Part 200.521.”
The Uniform Guidance further states: “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.
In addition, Uniform Guidance, Part 200.501(h) states in part, “the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients.” and “Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits.”
Condition – Based on our observations, discussions with the Department officials, and the procedures we performed, we determined proper subrecipient monitoring was not performed for the period of our review, April 1, 2015, through May 31, 2022. According to the Department officials we spoke with, the fiscal agent changed several times during Ms. Spragur-Tate’s employment and fiscal monitoring did not happen.
Cause – The Department has not established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h).
Recommendation – The Department should establish policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Response and Corrective Action Planned – To begin, Iowa Workforce Development did conduct monitoring of subrecipient activities throughout the relevant period. However, the sophistication and intent behind the fraud, coupled with structural weaknesses in the oversight processes, allowed these actions to persist undetected. While the monitoring in place adhered to Federal standards, the circumstances demonstrated the need for a more targeted approach to identify potential vulnerabilities proactively, especially when dealing with sophisticated methods employed by fraudsters. Second, the findings in this report clearly highlight a significant breakdown in internal controls that allowed fraudulent activities to occur over an extended period of time. The misuse of $436,179.92 in program funds, including $321,520.32 in questioned costs under the Workforce Innovation and Opportunity Act (WIOA), underscores the exploitation of these weaknesses by an individual who acted with intent to defraud. When an individual willfully circumvents internal controls at multiple levels, including fiscal agents, the subrecipient organization, and the external auditors – this highlights the importance of strong internal controls, and risk assessments by all parties involved. Effective oversight requires reciprocal diligence by all stakeholders, and in this instance, the extended period during which irregularities occurred suggests an opportunity for more proactive intervention at all levels.
Moreover, Iowa Workforce Development has already initiated measures to address the issues raised within this report, including:
• Enhanced Monitoring Protocols: Revising and expanding monitoring practices to include more frequent on-site reviews, enhanced financial documentation requirements, and stricter oversight of subrecipient compliance with state & federal statutes.
• Training and Capacity Building: Conducting mandatory training sessions for Iowa Workforce Development staff and providing necessary technical assistance to subrecipients to ensure a thorough understanding of grant management requirements.
• Auditor Accountability: Collaborating and creating a more transparent relationship with the state auditor’s office to establish clearer expectations for identifying and reporting financial discrepancies promptly, as well as discussing potential issues that arise more frequently.
Iowa Workforce Development remains committed to continue collaborating with all stakeholders – at the Federal and State level – to ensure situations such as this do not occur hereafter.
Conclusion – Response accepted.
Subrecipient Monitoring Questionable Cost- Children and Families of Iowa
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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, 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 Part 200.521.”
The Uniform Guidance further states: “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.
In addition, Uniform Guidance, Part 200.501(h) states in part, “the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients.” and “Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits.”
Condition – Based on our observations, discussions with the Department officials, and the procedures we performed, we determined proper subrecipient monitoring was not performed for the period of our review, April 1, 2015, through May 31, 2022. According to the Department officials we spoke with, the fiscal agent changed several times during Ms. Spragur-Tate’s employment and fiscal monitoring did not happen.
Cause – The Department has not established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h).
Recommendation – The Department should establish policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Response and Corrective Action Planned – To begin, Iowa Workforce Development did conduct monitoring of subrecipient activities throughout the relevant period. However, the sophistication and intent behind the fraud, coupled with structural weaknesses in the oversight processes, allowed these actions to persist undetected. While the monitoring in place adhered to Federal standards, the circumstances demonstrated the need for a more targeted approach to identify potential vulnerabilities proactively, especially when dealing with sophisticated methods employed by fraudsters. Second, the findings in this report clearly highlight a significant breakdown in internal controls that allowed fraudulent activities to occur over an extended period of time. The misuse of $436,179.92 in program funds, including $321,520.32 in questioned costs under the Workforce Innovation and Opportunity Act (WIOA), underscores the exploitation of these weaknesses by an individual who acted with intent to defraud. When an individual willfully circumvents internal controls at multiple levels, including fiscal agents, the subrecipient organization, and the external auditors – this highlights the importance of strong internal controls, and risk assessments by all parties involved. Effective oversight requires reciprocal diligence by all stakeholders, and in this instance, the extended period during which irregularities occurred suggests an opportunity for more proactive intervention at all levels.
Moreover, Iowa Workforce Development has already initiated measures to address the issues raised within this report, including:
• Enhanced Monitoring Protocols: Revising and expanding monitoring practices to include more frequent on-site reviews, enhanced financial documentation requirements, and stricter oversight of subrecipient compliance with state & federal statutes.
• Training and Capacity Building: Conducting mandatory training sessions for Iowa Workforce Development staff and providing necessary technical assistance to subrecipients to ensure a thorough understanding of grant management requirements.
• Auditor Accountability: Collaborating and creating a more transparent relationship with the state auditor’s office to establish clearer expectations for identifying and reporting financial discrepancies promptly, as well as discussing potential issues that arise more frequently.
Iowa Workforce Development remains committed to continue collaborating with all stakeholders – at the Federal and State level – to ensure situations such as this do not occur hereafter.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Governor allocated Coronavirus State and Local Recovery Funds to the Department for Child Care Business Incentive to encourage and enable businesses and employer consortiums to build on-site childcare centers or partner with local and regional childcare services to renovate and expand. Health Careers Registered Apprenticeship 2.0 Grant was created to establish new or expand existing, high school-based and/or adult registered apprenticeship programs for health careers in nursing, emergency medical services, direct support care and behavioral health career pathways. The Healthy Childhood Environments: Child Care Challenge project was to create new childcare slots across the State and help communities improve their childcare options and bolster opportunities for Iowans to reenter the workforce. All the projects are designed to address childcare shortages and alleviate local childcare need.
The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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, in part, subrecipient's unique entity identifier, federal award identification number (FAIN), subaward budget period start and end date, identification of whether the award is research and development and the indirect cost rate for the federal award (including if the de minimis rate is charged) per Part 200.414.
Condition – For the subawards provided, the Department did not include the identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Cause – The Department has not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients was not included due to the lack of policies and procedures.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective August 2023; new sub-awards and pass thru grant agreements have elements specified in the respective agreement as required by Uniform Guidance, Part 200.332. In addition, Iowa Workforce Development is in the process of reaching out to grantees whose awards did not clearly state that the specified award is research and development, and that there will be no indirect costs assumed for reimbursement, as this was assumed given the nature of the projects as well as discussions that were had during the awarding process.
Conclusion – Response accepted.
Monitoring of Subrecipient Audit Reports
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Condition – The Department did not review sixteen of sixteen subrecipient audit reports in a timely manner.
Cause – Although policies and procedures have been established to obtain and perform desk reviews of audit reports for subrecipients which expend more than $750,000 from the Department each year, these policies were not followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by Uniform Guidance, Part 200.332 and Part 200.501.
Recommendation – The Department should follow established policies and procedures to ensure subrecipient audit reports are reviewed in a timely manner and ensure compliance with Uniform Guidance, Part 200.332 and Part 200.501.
Response and Corrective Action Planned – Previous practice was for the fiscal team to lead fiscal monitoring practices for individual funding streams. This practice was beyond the scope of federal monitoring requirements. In 2020, the team began relying on the already-existing, robust fiscal monitoring of the same subrecipients for the Community Services Block Grant program. The Community Services Block Grant program reviews the most recent financial audit of each subgrantee and reviews fiscal operations for compliance with rules and procedures by conducting risk assessments, triennial monitoring reviews, and annual agency self-assessments. This practice meets the reporting requirements of the WAP.
Program staff now assume full responsibility for fiscal monitoring. The WAP team have analyzed the current practice and will address this with our federal partners in an upcoming monitoring visit in April 2025. HHS will remedy the discrepancy between program documentation and policy and practice by updating our State Plan and program and policy manuals. Updates will occur by April 30, 2025, to reflect the federally compliant subrecipient monitoring that is occurring.
Conclusion – Response accepted.
Fiscal Monitoring
Criteria – The Department’s State Weatherization Plan submitted to the U.S. Department of Energy requires fiscal monitoring of all subrecipients to be performed. Each fiscal monitoring review is performed using both in-house and on-site reviews. In-house fiscal monitoring consists of reviewing subgrantees' monthly fiscal reports and their most recent annual financial audits. On-site fiscal monitoring consists of reviewing fiscal operations for compliance with rules and procedures. Each subrecipient is monitored annually.
Condition – The Department did not perform fiscal monitoring on sixteen of sixteen subrecipients for the year ended June 30, 2024.
Cause – Although policies and procedures have been established to perform fiscal monitoring on all subrecipients, these policies were not followed.
Effect – The Department is not in compliance with the State Weatherization Plan.
Recommendation – The Department should follow established policies and procedures to ensure fiscal monitoring is performed for all subrecipients.
Response and Corrective Action Planned – Previous practice was for the fiscal team to lead fiscal monitoring practices for individual funding streams. This practice was beyond the scope of federal monitoring requirements. In 2020, the team began relying on the already-existing, robust fiscal monitoring of the same subrecipients for the Community Services Block Grant program. The Community Services Block Grant program reviews the most recent financial audit of each subgrantee and reviews fiscal operations for compliance with rules and procedures by conducting risk assessments, triennial monitoring reviews, and annual agency self-assessments. This practice meets the reporting requirements of the WAP.
Program staff now assume full responsibility for fiscal monitoring. The WAP team have analyzed the current practice and will address this with our federal partners in an upcoming monitoring visit in April 2025. HHS will remedy the discrepancy between program documentation and policy and practice by updating our State Plan and program and policy manuals. Updates will occur by April 30, 2025, to reflect the federally compliant subrecipient monitoring that is occurring.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for Weatherization Assistance for Low-Income subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response accepted.
Case Service Report RSA-911
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award. The RSA-911 report provides information on the job candidate applicants and eligible individuals records of services. These services include, “In the event an individual obtains competitive employment, verification that the individual is compensated at or above the minimum wage and that the individual’s wage and level of benefits are not less than that customarily paid by the employer for the same or similar work performed by non-disabled individuals”, in accordance with §361.5(c)(9)(i).
The Compliance Supplement requires the report to be submitted electronically for each calendar quarter to the Rehabilitation Services Administration of the U.S. Department of Education within 45 days after the end of each quarter.
Condition – The Department has indicated the RSA-911 reports submitted during fiscal year 2024 were reviewed and approved. However, this review was not documented for four out of four quarterly reports.
Cause – Department procedures have not been established to ensure reports are independently reviewed and approval of the reports is documented.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Iowa Department for the Blind will establish policies and procedures to ensure the 911 quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program, effective with the March 31, 2025 report.
Conclusion – Response accepted.
Case Service Report RSA-911
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The RSA-911 report provides information on the job candidate applicants and eligible individuals records of services. These services include, “In the event that an individual obtains competitive employment, verification that the individual is compensated at or above the minimum wage and that the individual’s wage and level of benefits are not less than that customarily paid by the employer for the same or similar work performed by non-disabled individuals”, in accordance with §361.5(c)(9)(i).
The Compliance Supplement requires the report to be submitted electronically for each calendar quarter to the Rehabilitation Services Administration of the U.S. Department of Education within 45 days after the end of the reporting quarter to which it relates.
Condition – The Department has indicated the RSA-911 reports submitted during fiscal year 2024 were reviewed and approved; however, this review was not documented for four out of four quarterly reports.
Cause – Department procedures have not been established to ensure reports are independently reviewed and approval of the reports are documented.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – Iowa Vocational Rehabilitation Service staff have made the necessary internal control updates to assure that appropriate staff certify the accuracy of the report and is inclusive of signature for approval at the necessary approver level.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Private Insurance Holders Questionnaires
Criteria – Per Chapter 1, page 34 of the Iowa Health and Human Services Medicaid Provider Manual, the Medicaid Program is the payer of last resort for covered medical services. Federal and state rules require that providers make a reasonable effort to pursue third-party resources. The provider is responsible for determining whether the member has Medicare or other insurance. Providers must bill Medicare and other third-party coverage before submitting claims to Iowa Medicaid.
Once a person has been approved for admission, the guardian or responsible party listed is provided Form 470-2826 Insurance Questionnaire which provides whether the person is covered by any third-party resources.
Condition – During the year ended June 30, 2024, Woodward Resource Center did not complete the Insurance Questionnaire and, therefore, was not able to determine if private insurance holders existed.
Cause – Although the Department has established policies regarding case file documentation, the policies were not followed.
Effect – Payments could be made to ineligible recipients or for improper amounts.
Recommendation – The Department should establish procedures to ensure client insurance questionnaires are properly completed.
Response and Corrective Action Planned – 470-2826 Insurance Questionnaire is not required by providers and is not used by providers to make a determination if other insurance exists. The form is not the means by which third party insurance is collected by providers or verified by the Medicaid program. This form is only used by members and is only one way in which Medicaid receives insurance information. Additionally, Woodward Resource Center does not have a policy or procedure that requires completion of the questionnaire and has no purpose for.
This form is used for Medicaid members to report insurance information to Iowa HHS.
Per Chapter 1, of the Iowa Health and Human Services Medicaid Provider Manual, Providers are required to first check for other insurance using the methods outlined in the manual. In addition, providers should question the member to determine if any other health care resources are available for payment
If a discrepancy exists between the member’s statement and the verification system, they should notify the Iowa Medicaid Revenue Collection Unit for fee-for-service members, the appropriate MCO or dental plan for IA Health Link members.
When members complete and submit the 470-2826 Insurance Questionnaire or a provider completes 470-5445 Insurance Update for FFS Members, the information provided is considered an insurance lead, and the insurance must be verified by Iowa HHS. This is one of multiple procedures in place to ensure TPL is identified for members.
In addition to verifying insurance leads submitted to Iowa HHS or the MCOs, by members or providers, Iowa HHS and the MCOs complete insurance verifications to identify third party payors through data matching daily. Verifications are completed daily through electronic data match agreements, websites, and calls to insurance carriers.
Conclusion – Response acknowledged. Documentation should be maintained in the case file to show determination of private insurance.
Allocable Cost
Criteria – The Uniform Guidance, Part 200.405(a), states “A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: is incurred specifically for the Federal award; benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.” Uniform Guidance, Part 200.405(a) states, “Direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis.”
Condition – The Department has established program codes to allocate costs to both Federal and non-Federal programs. The allocation of the expenditures charged to these program codes is based on a combination of square footage and actual time reported on Federal and non-Federal programs. Department policies require rates to be updated quarterly. Some rates were not updated quarterly during fiscal year 2024 affecting $892,043 for 1000 East Grand cost allocations.
Cause – The Department transitioned to a new payroll system and policies and procedures to identify time reporting requirements for staff and report capabilities were not in place to properly allocate costs. In addition, due to staff turnover, staff were not available to review rates and compare allocated costs to time entries.
Effect – Allocable costs could be charged to the incorrect program code, resulting in allocating costs incorrectly to all programs, including federal programs. The effect on individual programs is undeterminable.
Recommendation – The Department should follow policies and procedures and review the allocable rates used during the period and determine if corrective disbursement entries are needed for all programs, including federal programs.
Response and Corrective Action Planned – The Department will review its policies and procedures to determine how often cost rates should be updated to its cost allocation plan. IWD will be moving to an annual review, with quarterly updates only being made in the case of material changes or reorganizations – when and if they occur. If a material event does not occur, an annual review would suffice by the end of fiscal year 2025.
Conclusion – Response accepted.
Allocable Cost
Criteria – The Uniform Guidance, Part 200.405(a), states “A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: is incurred specifically for the Federal award; benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.” Uniform Guidance, Part 200.405(a) states, “Direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis.”
Condition – The Department has established program codes to allocate costs to both Federal and non-Federal programs. The allocation of the expenditures charged to these program codes is based on a combination of square footage and actual time reported on Federal and non-Federal programs. Department policies require rates to be updated quarterly. Some rates were not updated quarterly during fiscal year 2024 affecting $892,043 for 1000 East Grand cost allocations.
Cause – The Department transitioned to a new payroll system and policies and procedures to identify time reporting requirements for staff and report capabilities were not in place to properly allocate costs. In addition, due to staff turnover, staff were not available to review rates and compare allocated costs to time entries.
Effect – Allocable costs could be charged to the incorrect program code, resulting in allocating costs incorrectly to all programs, including federal programs. The effect on individual programs is undeterminable.
Recommendation – The Department should follow policies and procedures and review the allocable rates used during the period and determine if corrective disbursement entries are needed for all programs, including federal programs.
Response and Corrective Action Planned – The Department will review its policies and procedures to determine how often cost rates should be updated to its cost allocation plan. IWD will be moving to an annual review, with quarterly updates only being made in the case of material changes or reorganizations – when and if they occur. If a material event does not occur, an annual review would suffice by the end of fiscal year 2025.
Conclusion – Response accepted.
IRS 940 Match
Criteria – Uniform Guidance Compliance Supplement states, “States are required to annually certify for each taxpayer the total amount of contributions required to be paid under state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the FUTA (Federal Unemployment Tax Act) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer’s IRS 940 FUTA tax form.”
The Internal Revenue Service (IRS) sends the Department a secure file typically in October of each year following the prior calendar year. Taxes received for calendar year ending December 31, 2022, were received in October 2023. IWD must certify and respond to each Federal Employer Identification Number even if there is no discrepancy.
The Department is also required to send back to the IRS the Federal Non-Filers file. This file lists all employers that filed with the state but did not file an IRS 940 FUTA tax form. Both the Certification file and the Non-Filers file must be sent back to the Internal Revenue Service by January 31, 2024. The Certification file is used to assign discrepancies to field auditors to determine the disposition of the discrepancy identified. The Department’s policy is designed to review each individual case within 180 days.
Condition – For the secure file received in October 2023, 5 of 25 discrepancies were not resolved within the 180-day period, as required, and an additional 19 of 25 discrepancies have not been resolved. For the secure file received in October 2022, 1 of 17 discrepancies were not resolved within the 180-day period, as required, and an additional 16 of 17 discrepancies have not been resolved.
Cause – Due to continued turnover of experienced field audit staff and the hiring and training timeline of new staff, the 940 workflows were not able to be resolved within the 180-day period.
Effect – The Department did not have discrepancies resolved in a timely manner.
Recommendation – The Department should follow the established policies and procedures to ensure discrepancies are followed up within 180 days.
Response and Corrective Action Planned – The Bureau has a new Bureau Chief and Management along with several newly hired and trained Field audit staff. The Department will follow policies and procedures in place for fiscal year 2025. As of this response, the fiscal year 2025 file currently only has 23 open 940 discrepancies remaining and will have those resolved by April 2025.
Conclusion – Response accepted.
IRS 940 Match
Criteria – Uniform Guidance Compliance Supplement states, “States are required to annually certify for each taxpayer the total amount of contributions required to be paid under state law for the calendar year and the amounts and dates of such payments in order for the taxpayer to be allowed the credit against the FUTA (Federal Unemployment Tax Act) tax (26 CFR sections 31.3302(a)-3(a)). In order to accomplish this certification, states annually perform a match of employer tax payments with credit claimed for these payments on the employer’s IRS 940 FUTA tax form.”
The Internal Revenue Service (IRS) sends the Department a secure file typically in October of each year following the prior calendar year. Taxes received for calendar year ending December 31, 2022, were received in October 2023. IWD must certify and respond to each Federal Employer Identification Number even if there is no discrepancy.
The Department is also required to send back to the IRS the Federal Non-Filers file. This file lists all employers that filed with the state but did not file an IRS 940 FUTA tax form. Both the Certification file and the Non-Filers file must be sent back to the Internal Revenue Service by January 31, 2024. The Certification file is used to assign discrepancies to field auditors to determine the disposition of the discrepancy identified. The Department’s policy is designed to review each individual case within 180 days.
Condition – For the secure file received in October 2023, 5 of 25 discrepancies were not resolved within the 180-day period, as required, and an additional 19 of 25 discrepancies have not been resolved. For the secure file received in October 2022, 1 of 17 discrepancies were not resolved within the 180-day period, as required, and an additional 16 of 17 discrepancies have not been resolved.
Cause – Due to continued turnover of experienced field audit staff and the hiring and training timeline of new staff, the 940 workflows were not able to be resolved within the 180-day period.
Effect – The Department did not have discrepancies resolved in a timely manner.
Recommendation – The Department should follow the established policies and procedures to ensure discrepancies are followed up within 180 days.
Response and Corrective Action Planned – The Bureau has a new Bureau Chief and Management along with several newly hired and trained Field audit staff. The Department will follow policies and procedures in place for fiscal year 2025. As of this response, the fiscal year 2025 file currently only has 23 open 940 discrepancies remaining and will have those resolved by April 2025.
Conclusion – Response accepted.
Cash Management Improvement Act
Criteria – Effective cash management procedures provide for minimizing the amount of time between the drawdown/request for federal funds and the disbursement of those funds by the Department. Effective cash management also minimizes the amount of state and other federal funds used to supplant programs until federal funds are received. Generally, a maximum of three days is considered acceptable between the receipt of federal funds and the disbursement of those funds.
Condition – A review of the Department’s records identified cash balances averaged approximately $25.8 million and were greater than a significant amount of approximately $7.9 million for the fiscal year.
Cause – Although procedures have been established to draw federal funds only in amounts sufficient to cover current needs, the Department did not review or update procedures to account for federal draws associated with pandemic related administrative programs and unemployment benefits.
Effect – Failure to follow procedures resulted in Department employees not detecting the error in the normal course of performing their assigned duties.
Recommendation – The Department should follow established procedures to ensure federal funds are drawn only in amounts sufficient to cover current needs and are disbursed in a timely manner without carrying excessive daily balances.
Response and Corrective Action Planned – The agency is currently having discussions with both Department of Labor, as well as with Department of Administrative Services to see if UI benefits would be able to be added as an exemption to the Treasury Stat agreement for CMIA requirements.
Conclusion: Response accepted.
Cash Management Improvement Act
Criteria – Effective cash management procedures provide for minimizing the amount of time between the drawdown/request for federal funds and the disbursement of those funds by the Department. Effective cash management also minimizes the amount of state and other federal funds used to supplant programs until federal funds are received. Generally, a maximum of three days is considered acceptable between the receipt of federal funds and the disbursement of those funds.
Condition – A review of the Department’s records identified cash balances averaged approximately $25.8 million and were greater than a significant amount of approximately $7.9 million for the fiscal year.
Cause – Although procedures have been established to draw federal funds only in amounts sufficient to cover current needs, the Department did not review or update procedures to account for federal draws associated with pandemic related administrative programs and unemployment benefits.
Effect – Failure to follow procedures resulted in Department employees not detecting the error in the normal course of performing their assigned duties.
Recommendation – The Department should follow established procedures to ensure federal funds are drawn only in amounts sufficient to cover current needs and are disbursed in a timely manner without carrying excessive daily balances.
Response and Corrective Action Planned – The agency is currently having discussions with both Department of Labor, as well as with Department of Administrative Services to see if UI benefits would be able to be added as an exemption to the Treasury Stat agreement for CMIA requirements.
Conclusion: Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award. The ETA 9050 report, “Time Lapse of All First Payments Except Workshare”, provides information on the time it takes, states to pay benefits to claimants for the first compensable week of unemployment. The ETA 9052 report, “Nonmonetary Determination Time Lapse Detection”, provides information on the time it takes, states to issue nonmonetary determinations from the date the issues are first detected by the agency.
The UI Reports Handbook No. 401 requires the reports to be submitted on the 20th of the month following the month to which the data relates.
Condition – Supporting documentation for the monthly reports was not retained.
Cause – Department procedures have not been established to retain supporting documentation for the data fields in the report.
Effect – The lack of supporting documentation increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the support for the preparation of the report is retained.
Response and Corrective Action Planned – The current UI mainframe system only allows for this data to be shown in summary form and cannot be obtained at the more detailed level. As modernization is set to go live in summer 2025, the new UI system will allow for this data to be obtained at a more detailed level, and then saved as support for these reports.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award. The ETA 9050 report, “Time Lapse of All First Payments Except Workshare”, provides information on the time it takes, states to pay benefits to claimants for the first compensable week of unemployment. The ETA 9052 report, “Nonmonetary Determination Time Lapse Detection”, provides information on the time it takes, states to issue nonmonetary determinations from the date the issues are first detected by the agency.
The UI Reports Handbook No. 401 requires the reports to be submitted on the 20th of the month following the month to which the data relates.
Condition – Supporting documentation for the monthly reports was not retained.
Cause – Department procedures have not been established to retain supporting documentation for the data fields in the report.
Effect – The lack of supporting documentation increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the support for the preparation of the report is retained.
Response and Corrective Action Planned – The current UI mainframe system only allows for this data to be shown in summary form and cannot be obtained at the more detailed level. As modernization is set to go live in summer 2025, the new UI system will allow for this data to be obtained at a more detailed level, and then saved as support for these reports.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2112 report, “UI Financial Transaction Summary”, is a monthly summary of transactions in a state unemployment fund which consists of the 8405 Clearing Account Unemployment Trust Fund (UTF) Account, and Benefit Payment Account. UI Reports Handbook No. 401 requires the report to be submitted to the Employment and Training Administration of the U.S. Department of Labor monthly, by the first day of the second month following the month of reference.
Condition – Short Time Compensation (STC) is an alternative to layoffs for employers experiencing a reduction in available work, STC allows employers to reduce the hours of work rather than laying off some employees. The Federal Employee Compensation Act (FECA) provides workers' compensation coverage for employment-related injuries and occupational diseases. The Department did not report Short Time Compensation and FECA benefit payments on the transaction summaries throughout the fiscal year. There were unexplained variances in fiscal year 2023 between the prior year ending balance and current year beginning balances, these variances were not resolved in fiscal year 2024. The Department’s UC Benefit payment account did not include FECA benefit draws and Unemployment Compensation for Ex-Servicemembers (UCX) benefit draws throughout the fiscal year. General ledgers were not maintained properly throughout fiscal year 2024. ETA 2112 reports did not match the monthly 8401 reports due to supporting documents not being updated timely.
In addition, balances reported on the June 2024 ETA 2112 report for the Benefit Payment Account column did not agree to support, the ETA 2112 figure for the beginning benefit payment account balance was overstated by $5,287,695 and the ending benefit payment account balance was overstated by $5,134,989.
The Department has indicated the ETA 2112 reports submitted during fiscal year 2024 were reviewed and approved; however, this review was not documented for two of twelve months.
Cause – The Department utilizes an external accounting system for the processing of Unemployment Insurance (UI) benefit payments to claimants. The benefit claimant system processes the claims, then communicates the information to the State’s accounting system, Iowa Advantage, for payment.
The benefit claimant system identifies benefit payments by State Unemployment and Federal Unemployment programs, including Federal Unemployment claims covered under various Acts enacted during the pandemic.
The Department has developed a process to reconcile benefit payments by type and in total between the Department’s benefit claimant system and Iowa Advantage daily to ensure benefit payments are accurately recorded for financial reporting purposes. Although the Department performed the reconciliations, variances were identified and remained uncorrected at the time of reporting for the ETA 2112 reports.
Effect – Incorrect supporting documentation, such as the ETA 8405 report and accounting ledgers, resulted in undetected reporting errors and misstatements and the lack of a documented review of these reports resulted in the errors being undetected and increases the risk for further undetected reporting errors or misstatements.
Recommendation – The Department should follow policies and procedures already established to ensure variances in the reconciliation process are investigated and corrected immediately. If errors are noted on the ETA 2112 reports after initial submission, the Department should amend the completed report to agree with the corrected supporting documentation.
The Department should establish policies and procedures to ensure the monthly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department will review with staff and retrain as necessary to follow existing policies and procedures to ensure variances identified during the year end reconciliation process are appropriately documented and reconciled to ending and beginning balances. In addition, management will review ETA 2112 reports for accuracy and to identify if an amended report should be filed.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2112 report, “UI Financial Transaction Summary”, is a monthly summary of transactions in a state unemployment fund which consists of the 8405 Clearing Account Unemployment Trust Fund (UTF) Account, and Benefit Payment Account. UI Reports Handbook No. 401 requires the report to be submitted to the Employment and Training Administration of the U.S. Department of Labor monthly, by the first day of the second month following the month of reference.
Condition – Short Time Compensation (STC) is an alternative to layoffs for employers experiencing a reduction in available work, STC allows employers to reduce the hours of work rather than laying off some employees. The Federal Employee Compensation Act (FECA) provides workers' compensation coverage for employment-related injuries and occupational diseases. The Department did not report Short Time Compensation and FECA benefit payments on the transaction summaries throughout the fiscal year. There were unexplained variances in fiscal year 2023 between the prior year ending balance and current year beginning balances, these variances were not resolved in fiscal year 2024. The Department’s UC Benefit payment account did not include FECA benefit draws and Unemployment Compensation for Ex-Servicemembers (UCX) benefit draws throughout the fiscal year. General ledgers were not maintained properly throughout fiscal year 2024. ETA 2112 reports did not match the monthly 8401 reports due to supporting documents not being updated timely.
In addition, balances reported on the June 2024 ETA 2112 report for the Benefit Payment Account column did not agree to support, the ETA 2112 figure for the beginning benefit payment account balance was overstated by $5,287,695 and the ending benefit payment account balance was overstated by $5,134,989.
The Department has indicated the ETA 2112 reports submitted during fiscal year 2024 were reviewed and approved; however, this review was not documented for two of twelve months.
Cause – The Department utilizes an external accounting system for the processing of Unemployment Insurance (UI) benefit payments to claimants. The benefit claimant system processes the claims, then communicates the information to the State’s accounting system, Iowa Advantage, for payment.
The benefit claimant system identifies benefit payments by State Unemployment and Federal Unemployment programs, including Federal Unemployment claims covered under various Acts enacted during the pandemic.
The Department has developed a process to reconcile benefit payments by type and in total between the Department’s benefit claimant system and Iowa Advantage daily to ensure benefit payments are accurately recorded for financial reporting purposes. Although the Department performed the reconciliations, variances were identified and remained uncorrected at the time of reporting for the ETA 2112 reports.
Effect – Incorrect supporting documentation, such as the ETA 8405 report and accounting ledgers, resulted in undetected reporting errors and misstatements and the lack of a documented review of these reports resulted in the errors being undetected and increases the risk for further undetected reporting errors or misstatements.
Recommendation – The Department should follow policies and procedures already established to ensure variances in the reconciliation process are investigated and corrected immediately. If errors are noted on the ETA 2112 reports after initial submission, the Department should amend the completed report to agree with the corrected supporting documentation.
The Department should establish policies and procedures to ensure the monthly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department will review with staff and retrain as necessary to follow existing policies and procedures to ensure variances identified during the year end reconciliation process are appropriately documented and reconciled to ending and beginning balances. In addition, management will review ETA 2112 reports for accuracy and to identify if an amended report should be filed.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2208A report, “Quarterly UI Contingency Report”, provides information on the number of staff years worked and paid for various UI program categories, and provides the basis for determining above-base entitlements. UI Reports Handbook No. 336 requires the report to be submitted electronically for each calendar quarter to the Employment and Training Administration of the U.S. Department of Labor within 30 days after the end of the reporting quarter to which it relates.
Condition – Three of four quarterly reports were submitted between one and twenty-four days late. In addition, the Department has stated the reports were reviewed and approved; however, this review was not documented for two out of four quarterly reports.
Cause – Turnover of Financial leadership resulted in lack of independent review and approvals required for filing.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements. In addition, the lack of established policies and procedures resulted in the late submission of the three reports.
Recommendation – The Department should establish policies and procedures to ensure reports are submitted timely in accordance with UI Reports Handbook. The policies established should also ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – During fiscal year 2024, Iowa Workforce Development was without a CFO and Deputy CFO for a majority of the year. Once a CFO and Deputy were onboarded, these reviews began as required by internal policies and procedures.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The ETA 2208A report, “Quarterly UI Contingency Report”, provides information on the number of staff years worked and paid for various UI program categories, and provides the basis for determining above-base entitlements. UI Reports Handbook No. 336 requires the report to be submitted electronically for each calendar quarter to the Employment and Training Administration of the U.S. Department of Labor within 30 days after the end of the reporting quarter to which it relates.
Condition – Three of four quarterly reports were submitted between one and twenty-four days late. In addition, the Department has stated the reports were reviewed and approved; however, this review was not documented for two out of four quarterly reports.
Cause – Turnover of Financial leadership resulted in lack of independent review and approvals required for filing.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements. In addition, the lack of established policies and procedures resulted in the late submission of the three reports.
Recommendation – The Department should establish policies and procedures to ensure reports are submitted timely in accordance with UI Reports Handbook. The policies established should also ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – During fiscal year 2024, Iowa Workforce Development was without a CFO and Deputy CFO for a majority of the year. Once a CFO and Deputy were onboarded, these reviews began as required by internal policies and procedures.
Conclusion – Response accepted.
Benefit Accuracy Measurement (BAM) Cases
Criteria – Benefit Accuracy Measurement was designed to determine the accuracy of paid and denied claims in the unemployment insurance program. BAM investigators reconstruct the Unemployment insurance claims process for samples of weekly payments and denied claims. Once investigations are complete, states are required to submit their findings to the Office of Unemployment Insurance database. Cases are to be reviewed timely. State agencies must complete 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. This is 120 days after the end of the Payment Integrity Information Act year end for June 30th.
Condition – Management decided to close cases if they were over 150 days old so that the Quality Control Department could focus on current cases. However, Workforce Development did not have written instruction from the Department of Labor to close these cases and was denied relief by the Department of Labor when requested. For the year ended June 30, 2024, Workforce Development closed 75.42% of paid cases. In addition, out of the 40 cases selected for testing, 11 were missing at least one of the required documents.
Cause – The BAM team was pulled off BAM cases during the pandemic to assist claimants in getting UI benefits. After the pandemic, the Department had a complete turnover in BAM staff with several retirements and promotions to other units.
Effect – The lack of required documents and timely review increases the risk for undetected claim errors.
Recommendation – The Department should establish policies and procedures to ensure 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. The Department should also establish policies and procedures to ensure all required documents are retained.
Response and Corrective Action Planned – Iowa has been working with our region five UI program specialist at Department of Labor and other region five states to set goals and make major changes to our processes. Iowa BAM team as of February 1, 2025, is now paperless. This will reduce the amount of time printing, scanning and manually reviewing cases. We will have seven BAM Auditors at this point with one retiring in March. This position has already been posted to refill. Additionally, we still have part-time help from previous BAM Auditors who are still employed in the Unemployment Division.
As stated above we have gone paperless. The amount of time spent printing each case, organizing etc. was extraordinary. We have also updated all documents, and they are located in a central location for use by the team. We will meet with BAM Auditors on a weekly basis (done by Workforce Program Coordinator) to keep Auditors on track and to assist them with any case issue. They will also self-report on case progress weekly so they can be assisted in the event the timeline is in danger of not being met. The Quality Control Manager will send weekly progress updates to the Bureau Chief on each person’s case management workload in addition to meeting with each Auditor.
Conclusion – Response accepted.
Benefit Accuracy Measurement (BAM) Cases
Criteria – Benefit Accuracy Measurement was designed to determine the accuracy of paid and denied claims in the unemployment insurance program. BAM investigators reconstruct the Unemployment insurance claims process for samples of weekly payments and denied claims. Once investigations are complete, states are required to submit their findings to the Office of Unemployment Insurance database. Cases are to be reviewed timely. State agencies must complete 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. This is 120 days after the end of the Payment Integrity Information Act year end for June 30th.
Condition – Management decided to close cases if they were over 150 days old so that the Quality Control Department could focus on current cases. However, Workforce Development did not have written instruction from the Department of Labor to close these cases and was denied relief by the Department of Labor when requested. For the year ended June 30, 2024, Workforce Development closed 75.42% of paid cases. In addition, out of the 40 cases selected for testing, 11 were missing at least one of the required documents.
Cause – The BAM team was pulled off BAM cases during the pandemic to assist claimants in getting UI benefits. After the pandemic, the Department had a complete turnover in BAM staff with several retirements and promotions to other units.
Effect – The lack of required documents and timely review increases the risk for undetected claim errors.
Recommendation – The Department should establish policies and procedures to ensure 98% of the valid cases sampled in the Payment Integrity Information Act year by October 30th. The Department should also establish policies and procedures to ensure all required documents are retained.
Response and Corrective Action Planned – Iowa has been working with our region five UI program specialist at Department of Labor and other region five states to set goals and make major changes to our processes. Iowa BAM team as of February 1, 2025, is now paperless. This will reduce the amount of time printing, scanning and manually reviewing cases. We will have seven BAM Auditors at this point with one retiring in March. This position has already been posted to refill. Additionally, we still have part-time help from previous BAM Auditors who are still employed in the Unemployment Division.
As stated above we have gone paperless. The amount of time spent printing each case, organizing etc. was extraordinary. We have also updated all documents, and they are located in a central location for use by the team. We will meet with BAM Auditors on a weekly basis (done by Workforce Program Coordinator) to keep Auditors on track and to assist them with any case issue. They will also self-report on case progress weekly so they can be assisted in the event the timeline is in danger of not being met. The Quality Control Manager will send weekly progress updates to the Bureau Chief on each person’s case management workload in addition to meeting with each Auditor.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The ETA 9130, “Financial Status Report”, is the quarterly summary of program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. U.S. Department of Labor Employment and Training Administration Financial Report Instructions requires the report to be submitted electronically no later than 45 calendar days after each specified reporting period. A closeout report is required to be submitted no later than 90 calendar days after the grant end date.
Condition – Out of the 26 reports tested, two for program year 2024 for State and Local Youth programs were submitted and certified one day late.
For four of the 14 final reports, the total expenditures do not agree with the state’s accounting system. In total the reports were overstated $503,067, with ranges of an overstatement of $517,797 to an understatement of $14,730.
Cause – Due to staff turnover, the Department didn’t have enough adequate resources to ensure reconciliation of the state accounting system by program was performed, or ETA 9130 reports were independently reviewed, supporting records, and documentation was retained.
Effect – Reports submitted to the federal government could be inaccurate and not reflect actual program expenditures made by the Department. The Department is not in compliance with federal reporting deadlines.
Recommendation – The Department should establish policies and procedures to ensure expenditures are properly reported and a reconciliation to the state accounting system is performed. The Department should also establish policies and procedures to ensure reports are submitted timely.
Response and Corrective Action Planned – The Department has implemented a procedure to ensure ETA 9130 reports are filed timely and reconcile to supporting documentation. Moreover, all staff have access to a reporting calendar that flags reporting deadlines, so that way adequate reviews can be completed ahead of deadlines.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The ETA 9130, “Financial Status Report”, is the quarterly summary of program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. U.S. Department of Labor Employment and Training Administration Financial Report Instructions requires the report to be submitted electronically no later than 45 calendar days after each specified reporting period. A closeout report is required to be submitted no later than 90 calendar days after the grant end date.
Condition – Out of the 26 reports tested, two for program year 2024 for State and Local Youth programs were submitted and certified one day late.
For four of the 14 final reports, the total expenditures do not agree with the state’s accounting system. In total the reports were overstated $503,067, with ranges of an overstatement of $517,797 to an understatement of $14,730.
Cause – Due to staff turnover, the Department didn’t have enough adequate resources to ensure reconciliation of the state accounting system by program was performed, or ETA 9130 reports were independently reviewed, supporting records, and documentation was retained.
Effect – Reports submitted to the federal government could be inaccurate and not reflect actual program expenditures made by the Department. The Department is not in compliance with federal reporting deadlines.
Recommendation – The Department should establish policies and procedures to ensure expenditures are properly reported and a reconciliation to the state accounting system is performed. The Department should also establish policies and procedures to ensure reports are submitted timely.
Response and Corrective Action Planned – The Department has implemented a procedure to ensure ETA 9130 reports are filed timely and reconcile to supporting documentation. Moreover, all staff have access to a reporting calendar that flags reporting deadlines, so that way adequate reviews can be completed ahead of deadlines.
Conclusion – Response accepted.
Employment and Training Administration (ETA) Reports
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The ETA 9130, “Financial Status Report”, is the quarterly summary of program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. U.S. Department of Labor Employment and Training Administration Financial Report Instructions requires the report to be submitted electronically no later than 45 calendar days after each specified reporting period. A closeout report is required to be submitted no later than 90 calendar days after the grant end date.
Condition – Out of the 26 reports tested, two for program year 2024 for State and Local Youth programs were submitted and certified one day late.
For four of the 14 final reports, the total expenditures do not agree with the state’s accounting system. In total the reports were overstated $503,067, with ranges of an overstatement of $517,797 to an understatement of $14,730.
Cause – Due to staff turnover, the Department didn’t have enough adequate resources to ensure reconciliation of the state accounting system by program was performed, or ETA 9130 reports were independently reviewed, supporting records, and documentation was retained.
Effect – Reports submitted to the federal government could be inaccurate and not reflect actual program expenditures made by the Department. The Department is not in compliance with federal reporting deadlines.
Recommendation – The Department should establish policies and procedures to ensure expenditures are properly reported and a reconciliation to the state accounting system is performed. The Department should also establish policies and procedures to ensure reports are submitted timely.
Response and Corrective Action Planned – The Department has implemented a procedure to ensure ETA 9130 reports are filed timely and reconcile to supporting documentation. Moreover, all staff have access to a reporting calendar that flags reporting deadlines, so that way adequate reviews can be completed ahead of deadlines.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for WIOA Cluster subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – As of the beginning of fiscal year 2025, the Department has established the necessary policies and procedures surrounding FFATA reporting, and all necessary reporting has been completed for the current fiscal year.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for WIOA Cluster subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – As of the beginning of fiscal year 2025, the Department has established the necessary policies and procedures surrounding FFATA reporting, and all necessary reporting has been completed for the current fiscal year.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for WIOA Cluster subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – As of the beginning of fiscal year 2025, the Department has established the necessary policies and procedures surrounding FFATA reporting, and all necessary reporting has been completed for the current fiscal year.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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 identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Condition – For five out of six subawards, the Department did not include identification of whether the award is research and development or indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. These contracts also did not include the subrecipient’s Unique Entity Identifiers, nor the Federal Award Date.
Cause – At the time the tested agreements were established, the Department had not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients would result in grantee’s not being aware of their current indirect cost rate allowance, or if the award was for R&D purposes.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective late fiscal year 2024; new sub-awards and pass thru grant agreements utilize a cover sheet to ensure all required elements listed in
2 CFR 200.332 are clearly included in the subaward agreements.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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 identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Condition – For five out of six subawards, the Department did not include identification of whether the award is research and development or indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. These contracts also did not include the subrecipient’s Unique Entity Identifiers, nor the Federal Award Date.
Cause – At the time the tested agreements were established, the Department had not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients would result in grantee’s not being aware of their current indirect cost rate allowance, or if the award was for R&D purposes.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective late fiscal year 2024; new sub-awards and pass thru grant agreements utilize a cover sheet to ensure all required elements listed in
2 CFR 200.332 are clearly included in the subaward agreements.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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 identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Condition – For five out of six subawards, the Department did not include identification of whether the award is research and development or indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. These contracts also did not include the subrecipient’s Unique Entity Identifiers, nor the Federal Award Date.
Cause – At the time the tested agreements were established, the Department had not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients would result in grantee’s not being aware of their current indirect cost rate allowance, or if the award was for R&D purposes.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective late fiscal year 2024; new sub-awards and pass thru grant agreements utilize a cover sheet to ensure all required elements listed in
2 CFR 200.332 are clearly included in the subaward agreements.
Conclusion – Response accepted.
Subrecipient Monitoring
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance further states, “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program-related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Iowa Workforce Development’s written procedures regarding subrecipient monitoring related to WIOA onsite monitoring read, in part, as follows: “Iowa Workforce Development will issue a monitoring report to the Local Workforce Development Board within 30 business days from the conclusion of the monitoring review, summarizing the oversight activity results, which may include findings and required corrective actions, areas of concern and suggestions and promising practices.” Also stated, “Within 20 business days of the receipt of the corrective action plan, Iowa Workforce Development will review the plan and make an initial determination addressing the acceptability of the implemented or planned corrective actions to resolve any findings.”
Condition – The only region to have audit report monitoring performed in fiscal year 2024 included an audit report routing sheet noting a required follow-up. However, there was no documentation on the audit report routing sheet noting that the follow-up was performed.
For one out of six regions tested for program monitoring, the region did not receive their initial monitoring report within 30 days after the onsite review ended. For three out of six regions tested, the regions did not receive an initial determination letter from the Department within 20 days of submitting their corrective action plan.
Cause – The Department has not adhered to established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). Also, the Department has not adhered to established policies and procedures to ensure all required aspects of the WIOA Program Monitoring Letters are followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department is not in compliance with their written subrecipient monitoring policies.
Recommendation – The Department should review established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department should also establish policies and procedures to ensure compliance with their written subrecipient monitoring policies and either ensure established policies and procedures are followed or update their written subrecipient monitoring policies
Response and Corrective Action Planned – The Department established policies and procedures to perform financial subrecipient monitoring for subawards related to WIOA and began that process in May 2023. This finding centers on the timing of monitoring reports and determination letters. While not all monitoring reports and/or determination letters were issued timely per the policy, all local areas were notified if/when a report or determination letter could be expected to be sent after the established time frames in state policy. This is not because monitoring was not complete, but rather, to ensure comprehensive and effective monitoring reports and determination letters were issued, demonstrating Iowa Workforce Development’s commitment to thorough and effective monitoring of its subrecipients. The Department is also enhancing its fiscal review process starting with funding requests from sub-recipients and partnering with WIOA Title I program staff to identify areas of risk. Monitoring will continue to be performed to ensure compliance with WIOA and Uniform Guidance, Part 200.332 and Part 200.501(h).
Conclusion – Response accepted.
Subrecipient Monitoring
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance further states, “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program-related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Iowa Workforce Development’s written procedures regarding subrecipient monitoring related to WIOA onsite monitoring read, in part, as follows: “Iowa Workforce Development will issue a monitoring report to the Local Workforce Development Board within 30 business days from the conclusion of the monitoring review, summarizing the oversight activity results, which may include findings and required corrective actions, areas of concern and suggestions and promising practices.” Also stated, “Within 20 business days of the receipt of the corrective action plan, Iowa Workforce Development will review the plan and make an initial determination addressing the acceptability of the implemented or planned corrective actions to resolve any findings.”
Condition – The only region to have audit report monitoring performed in fiscal year 2024 included an audit report routing sheet noting a required follow-up. However, there was no documentation on the audit report routing sheet noting that the follow-up was performed.
For one out of six regions tested for program monitoring, the region did not receive their initial monitoring report within 30 days after the onsite review ended. For three out of six regions tested, the regions did not receive an initial determination letter from the Department within 20 days of submitting their corrective action plan.
Cause – The Department has not adhered to established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). Also, the Department has not adhered to established policies and procedures to ensure all required aspects of the WIOA Program Monitoring Letters are followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department is not in compliance with their written subrecipient monitoring policies.
Recommendation – The Department should review established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department should also establish policies and procedures to ensure compliance with their written subrecipient monitoring policies and either ensure established policies and procedures are followed or update their written subrecipient monitoring policies
Response and Corrective Action Planned – The Department established policies and procedures to perform financial subrecipient monitoring for subawards related to WIOA and began that process in May 2023. This finding centers on the timing of monitoring reports and determination letters. While not all monitoring reports and/or determination letters were issued timely per the policy, all local areas were notified if/when a report or determination letter could be expected to be sent after the established time frames in state policy. This is not because monitoring was not complete, but rather, to ensure comprehensive and effective monitoring reports and determination letters were issued, demonstrating Iowa Workforce Development’s commitment to thorough and effective monitoring of its subrecipients. The Department is also enhancing its fiscal review process starting with funding requests from sub-recipients and partnering with WIOA Title I program staff to identify areas of risk. Monitoring will continue to be performed to ensure compliance with WIOA and Uniform Guidance, Part 200.332 and Part 200.501(h).
Conclusion – Response accepted.
Subrecipient Monitoring
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance further states, “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program-related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Iowa Workforce Development’s written procedures regarding subrecipient monitoring related to WIOA onsite monitoring read, in part, as follows: “Iowa Workforce Development will issue a monitoring report to the Local Workforce Development Board within 30 business days from the conclusion of the monitoring review, summarizing the oversight activity results, which may include findings and required corrective actions, areas of concern and suggestions and promising practices.” Also stated, “Within 20 business days of the receipt of the corrective action plan, Iowa Workforce Development will review the plan and make an initial determination addressing the acceptability of the implemented or planned corrective actions to resolve any findings.”
Condition – The only region to have audit report monitoring performed in fiscal year 2024 included an audit report routing sheet noting a required follow-up. However, there was no documentation on the audit report routing sheet noting that the follow-up was performed.
For one out of six regions tested for program monitoring, the region did not receive their initial monitoring report within 30 days after the onsite review ended. For three out of six regions tested, the regions did not receive an initial determination letter from the Department within 20 days of submitting their corrective action plan.
Cause – The Department has not adhered to established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). Also, the Department has not adhered to established policies and procedures to ensure all required aspects of the WIOA Program Monitoring Letters are followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department is not in compliance with their written subrecipient monitoring policies.
Recommendation – The Department should review established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h). The Department should also establish policies and procedures to ensure compliance with their written subrecipient monitoring policies and either ensure established policies and procedures are followed or update their written subrecipient monitoring policies
Response and Corrective Action Planned – The Department established policies and procedures to perform financial subrecipient monitoring for subawards related to WIOA and began that process in May 2023. This finding centers on the timing of monitoring reports and determination letters. While not all monitoring reports and/or determination letters were issued timely per the policy, all local areas were notified if/when a report or determination letter could be expected to be sent after the established time frames in state policy. This is not because monitoring was not complete, but rather, to ensure comprehensive and effective monitoring reports and determination letters were issued, demonstrating Iowa Workforce Development’s commitment to thorough and effective monitoring of its subrecipients. The Department is also enhancing its fiscal review process starting with funding requests from sub-recipients and partnering with WIOA Title I program staff to identify areas of risk. Monitoring will continue to be performed to ensure compliance with WIOA and Uniform Guidance, Part 200.332 and Part 200.501(h).
Conclusion – Response accepted.
Subrecipient Monitoring Questionable Cost- Children and Families of Iowa
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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, 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 Part 200.521.”
The Uniform Guidance further states: “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.
In addition, Uniform Guidance, Part 200.501(h) states in part, “the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients.” and “Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits.”
Condition – Based on our observations, discussions with the Department officials, and the procedures we performed, we determined proper subrecipient monitoring was not performed for the period of our review, April 1, 2015, through May 31, 2022. According to the Department officials we spoke with, the fiscal agent changed several times during Ms. Spragur-Tate’s employment and fiscal monitoring did not happen.
Cause – The Department has not established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h).
Recommendation – The Department should establish policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Response and Corrective Action Planned – To begin, Iowa Workforce Development did conduct monitoring of subrecipient activities throughout the relevant period. However, the sophistication and intent behind the fraud, coupled with structural weaknesses in the oversight processes, allowed these actions to persist undetected. While the monitoring in place adhered to Federal standards, the circumstances demonstrated the need for a more targeted approach to identify potential vulnerabilities proactively, especially when dealing with sophisticated methods employed by fraudsters. Second, the findings in this report clearly highlight a significant breakdown in internal controls that allowed fraudulent activities to occur over an extended period of time. The misuse of $436,179.92 in program funds, including $321,520.32 in questioned costs under the Workforce Innovation and Opportunity Act (WIOA), underscores the exploitation of these weaknesses by an individual who acted with intent to defraud. When an individual willfully circumvents internal controls at multiple levels, including fiscal agents, the subrecipient organization, and the external auditors – this highlights the importance of strong internal controls, and risk assessments by all parties involved. Effective oversight requires reciprocal diligence by all stakeholders, and in this instance, the extended period during which irregularities occurred suggests an opportunity for more proactive intervention at all levels.
Moreover, Iowa Workforce Development has already initiated measures to address the issues raised within this report, including:
• Enhanced Monitoring Protocols: Revising and expanding monitoring practices to include more frequent on-site reviews, enhanced financial documentation requirements, and stricter oversight of subrecipient compliance with state & federal statutes.
• Training and Capacity Building: Conducting mandatory training sessions for Iowa Workforce Development staff and providing necessary technical assistance to subrecipients to ensure a thorough understanding of grant management requirements.
• Auditor Accountability: Collaborating and creating a more transparent relationship with the state auditor’s office to establish clearer expectations for identifying and reporting financial discrepancies promptly, as well as discussing potential issues that arise more frequently.
Iowa Workforce Development remains committed to continue collaborating with all stakeholders – at the Federal and State level – to ensure situations such as this do not occur hereafter.
Conclusion – Response accepted.
Subrecipient Monitoring Questionable Cost- Children and Families of Iowa
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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, 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 Part 200.521.”
The Uniform Guidance further states: “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.
In addition, Uniform Guidance, Part 200.501(h) states in part, “the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients.” and “Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits.”
Condition – Based on our observations, discussions with the Department officials, and the procedures we performed, we determined proper subrecipient monitoring was not performed for the period of our review, April 1, 2015, through May 31, 2022. According to the Department officials we spoke with, the fiscal agent changed several times during Ms. Spragur-Tate’s employment and fiscal monitoring did not happen.
Cause – The Department has not established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h).
Recommendation – The Department should establish policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Response and Corrective Action Planned – To begin, Iowa Workforce Development did conduct monitoring of subrecipient activities throughout the relevant period. However, the sophistication and intent behind the fraud, coupled with structural weaknesses in the oversight processes, allowed these actions to persist undetected. While the monitoring in place adhered to Federal standards, the circumstances demonstrated the need for a more targeted approach to identify potential vulnerabilities proactively, especially when dealing with sophisticated methods employed by fraudsters. Second, the findings in this report clearly highlight a significant breakdown in internal controls that allowed fraudulent activities to occur over an extended period of time. The misuse of $436,179.92 in program funds, including $321,520.32 in questioned costs under the Workforce Innovation and Opportunity Act (WIOA), underscores the exploitation of these weaknesses by an individual who acted with intent to defraud. When an individual willfully circumvents internal controls at multiple levels, including fiscal agents, the subrecipient organization, and the external auditors – this highlights the importance of strong internal controls, and risk assessments by all parties involved. Effective oversight requires reciprocal diligence by all stakeholders, and in this instance, the extended period during which irregularities occurred suggests an opportunity for more proactive intervention at all levels.
Moreover, Iowa Workforce Development has already initiated measures to address the issues raised within this report, including:
• Enhanced Monitoring Protocols: Revising and expanding monitoring practices to include more frequent on-site reviews, enhanced financial documentation requirements, and stricter oversight of subrecipient compliance with state & federal statutes.
• Training and Capacity Building: Conducting mandatory training sessions for Iowa Workforce Development staff and providing necessary technical assistance to subrecipients to ensure a thorough understanding of grant management requirements.
• Auditor Accountability: Collaborating and creating a more transparent relationship with the state auditor’s office to establish clearer expectations for identifying and reporting financial discrepancies promptly, as well as discussing potential issues that arise more frequently.
Iowa Workforce Development remains committed to continue collaborating with all stakeholders – at the Federal and State level – to ensure situations such as this do not occur hereafter.
Conclusion – Response accepted.
Subrecipient Monitoring Questionable Cost- Children and Families of Iowa
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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, 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 Part 200.521.”
The Uniform Guidance further states: “Depending upon the pass-through entity's assessment of risk posed by the subrecipient the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: providing subrecipients with training and technical assistance on program related matters, performing on-site reviews of the subrecipient's program operations and arranging for agreed-upon-procedures engagements as described in Part 200.425.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501. Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.
In addition, Uniform Guidance, Part 200.501(h) states in part, “the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients.” and “Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits.”
Condition – Based on our observations, discussions with the Department officials, and the procedures we performed, we determined proper subrecipient monitoring was not performed for the period of our review, April 1, 2015, through May 31, 2022. According to the Department officials we spoke with, the fiscal agent changed several times during Ms. Spragur-Tate’s employment and fiscal monitoring did not happen.
Cause – The Department has not established policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Effect – The Department is not in compliance with subrecipient monitoring as required by the Uniform Guidance, Part 200.332 and Part 200.501(h).
Recommendation – The Department should establish policies and procedures to ensure compliance with the Uniform Guidance, Part 200.332 and Part 200.501(h).
Response and Corrective Action Planned – To begin, Iowa Workforce Development did conduct monitoring of subrecipient activities throughout the relevant period. However, the sophistication and intent behind the fraud, coupled with structural weaknesses in the oversight processes, allowed these actions to persist undetected. While the monitoring in place adhered to Federal standards, the circumstances demonstrated the need for a more targeted approach to identify potential vulnerabilities proactively, especially when dealing with sophisticated methods employed by fraudsters. Second, the findings in this report clearly highlight a significant breakdown in internal controls that allowed fraudulent activities to occur over an extended period of time. The misuse of $436,179.92 in program funds, including $321,520.32 in questioned costs under the Workforce Innovation and Opportunity Act (WIOA), underscores the exploitation of these weaknesses by an individual who acted with intent to defraud. When an individual willfully circumvents internal controls at multiple levels, including fiscal agents, the subrecipient organization, and the external auditors – this highlights the importance of strong internal controls, and risk assessments by all parties involved. Effective oversight requires reciprocal diligence by all stakeholders, and in this instance, the extended period during which irregularities occurred suggests an opportunity for more proactive intervention at all levels.
Moreover, Iowa Workforce Development has already initiated measures to address the issues raised within this report, including:
• Enhanced Monitoring Protocols: Revising and expanding monitoring practices to include more frequent on-site reviews, enhanced financial documentation requirements, and stricter oversight of subrecipient compliance with state & federal statutes.
• Training and Capacity Building: Conducting mandatory training sessions for Iowa Workforce Development staff and providing necessary technical assistance to subrecipients to ensure a thorough understanding of grant management requirements.
• Auditor Accountability: Collaborating and creating a more transparent relationship with the state auditor’s office to establish clearer expectations for identifying and reporting financial discrepancies promptly, as well as discussing potential issues that arise more frequently.
Iowa Workforce Development remains committed to continue collaborating with all stakeholders – at the Federal and State level – to ensure situations such as this do not occur hereafter.
Conclusion – Response accepted.
Awards to Subrecipients
Criteria – The Governor allocated Coronavirus State and Local Recovery Funds to the Department for Child Care Business Incentive to encourage and enable businesses and employer consortiums to build on-site childcare centers or partner with local and regional childcare services to renovate and expand. Health Careers Registered Apprenticeship 2.0 Grant was created to establish new or expand existing, high school-based and/or adult registered apprenticeship programs for health careers in nursing, emergency medical services, direct support care and behavioral health career pathways. The Healthy Childhood Environments: Child Care Challenge project was to create new childcare slots across the State and help communities improve their childcare options and bolster opportunities for Iowans to reenter the workforce. All the projects are designed to address childcare shortages and alleviate local childcare need.
The Uniform Guidance, Part 200.332 states, “All pass-through entities must: 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, in part, subrecipient's unique entity identifier, federal award identification number (FAIN), subaward budget period start and end date, identification of whether the award is research and development and the indirect cost rate for the federal award (including if the de minimis rate is charged) per Part 200.414.
Condition – For the subawards provided, the Department did not include the identification of whether the award is research and development and the indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
Cause – The Department has not established policies and procedures to ensure all required information is included in the subaward to the subrecipients.
Effect – The information required in the subaward to subrecipients was not included due to the lack of policies and procedures.
Recommendation – The Department should establish policies and procedures to ensure all required information is included in the subaward to subrecipients as required by Uniform Guidance, Part 200.332.
Response and Corrective Action Planned – Effective August 2023; new sub-awards and pass thru grant agreements have elements specified in the respective agreement as required by Uniform Guidance, Part 200.332. In addition, Iowa Workforce Development is in the process of reaching out to grantees whose awards did not clearly state that the specified award is research and development, and that there will be no indirect costs assumed for reimbursement, as this was assumed given the nature of the projects as well as discussions that were had during the awarding process.
Conclusion – Response accepted.
Monitoring of Subrecipient Audit Reports
Criteria – The Uniform Guidance, Part 200.332 states in part, “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.” The Uniform Guidance, Part 200.332 also states, “All pass-through entities 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 reviewing financial and performance reports required by the pass-through entity, 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 pass-through 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 and 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 Part 200.521.”
The Uniform Guidance, Part 200.332 also states, “All pass-through entities must: Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Part 200.501.” and that “All pass-through entities must: consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.”
Condition – The Department did not review sixteen of sixteen subrecipient audit reports in a timely manner.
Cause – Although policies and procedures have been established to obtain and perform desk reviews of audit reports for subrecipients which expend more than $750,000 from the Department each year, these policies were not followed.
Effect – The Department is not in compliance with subrecipient monitoring as required by Uniform Guidance, Part 200.332 and Part 200.501.
Recommendation – The Department should follow established policies and procedures to ensure subrecipient audit reports are reviewed in a timely manner and ensure compliance with Uniform Guidance, Part 200.332 and Part 200.501.
Response and Corrective Action Planned – Previous practice was for the fiscal team to lead fiscal monitoring practices for individual funding streams. This practice was beyond the scope of federal monitoring requirements. In 2020, the team began relying on the already-existing, robust fiscal monitoring of the same subrecipients for the Community Services Block Grant program. The Community Services Block Grant program reviews the most recent financial audit of each subgrantee and reviews fiscal operations for compliance with rules and procedures by conducting risk assessments, triennial monitoring reviews, and annual agency self-assessments. This practice meets the reporting requirements of the WAP.
Program staff now assume full responsibility for fiscal monitoring. The WAP team have analyzed the current practice and will address this with our federal partners in an upcoming monitoring visit in April 2025. HHS will remedy the discrepancy between program documentation and policy and practice by updating our State Plan and program and policy manuals. Updates will occur by April 30, 2025, to reflect the federally compliant subrecipient monitoring that is occurring.
Conclusion – Response accepted.
Fiscal Monitoring
Criteria – The Department’s State Weatherization Plan submitted to the U.S. Department of Energy requires fiscal monitoring of all subrecipients to be performed. Each fiscal monitoring review is performed using both in-house and on-site reviews. In-house fiscal monitoring consists of reviewing subgrantees' monthly fiscal reports and their most recent annual financial audits. On-site fiscal monitoring consists of reviewing fiscal operations for compliance with rules and procedures. Each subrecipient is monitored annually.
Condition – The Department did not perform fiscal monitoring on sixteen of sixteen subrecipients for the year ended June 30, 2024.
Cause – Although policies and procedures have been established to perform fiscal monitoring on all subrecipients, these policies were not followed.
Effect – The Department is not in compliance with the State Weatherization Plan.
Recommendation – The Department should follow established policies and procedures to ensure fiscal monitoring is performed for all subrecipients.
Response and Corrective Action Planned – Previous practice was for the fiscal team to lead fiscal monitoring practices for individual funding streams. This practice was beyond the scope of federal monitoring requirements. In 2020, the team began relying on the already-existing, robust fiscal monitoring of the same subrecipients for the Community Services Block Grant program. The Community Services Block Grant program reviews the most recent financial audit of each subgrantee and reviews fiscal operations for compliance with rules and procedures by conducting risk assessments, triennial monitoring reviews, and annual agency self-assessments. This practice meets the reporting requirements of the WAP.
Program staff now assume full responsibility for fiscal monitoring. The WAP team have analyzed the current practice and will address this with our federal partners in an upcoming monitoring visit in April 2025. HHS will remedy the discrepancy between program documentation and policy and practice by updating our State Plan and program and policy manuals. Updates will occur by April 30, 2025, to reflect the federally compliant subrecipient monitoring that is occurring.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for Weatherization Assistance for Low-Income subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response accepted.
Case Service Report RSA-911
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award. The RSA-911 report provides information on the job candidate applicants and eligible individuals records of services. These services include, “In the event an individual obtains competitive employment, verification that the individual is compensated at or above the minimum wage and that the individual’s wage and level of benefits are not less than that customarily paid by the employer for the same or similar work performed by non-disabled individuals”, in accordance with §361.5(c)(9)(i).
The Compliance Supplement requires the report to be submitted electronically for each calendar quarter to the Rehabilitation Services Administration of the U.S. Department of Education within 45 days after the end of each quarter.
Condition – The Department has indicated the RSA-911 reports submitted during fiscal year 2024 were reviewed and approved. However, this review was not documented for four out of four quarterly reports.
Cause – Department procedures have not been established to ensure reports are independently reviewed and approval of the reports is documented.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Iowa Department for the Blind will establish policies and procedures to ensure the 911 quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program, effective with the March 31, 2025 report.
Conclusion – Response accepted.
Case Service Report RSA-911
Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulation and the terms of the federal award. The RSA-911 report provides information on the job candidate applicants and eligible individuals records of services. These services include, “In the event that an individual obtains competitive employment, verification that the individual is compensated at or above the minimum wage and that the individual’s wage and level of benefits are not less than that customarily paid by the employer for the same or similar work performed by non-disabled individuals”, in accordance with §361.5(c)(9)(i).
The Compliance Supplement requires the report to be submitted electronically for each calendar quarter to the Rehabilitation Services Administration of the U.S. Department of Education within 45 days after the end of the reporting quarter to which it relates.
Condition – The Department has indicated the RSA-911 reports submitted during fiscal year 2024 were reviewed and approved; however, this review was not documented for four out of four quarterly reports.
Cause – Department procedures have not been established to ensure reports are independently reviewed and approval of the reports are documented.
Effect – The lack of a documented review of these reports increases the risk for undetected reporting errors or misstatements.
Recommendation – The Department should establish policies and procedures to ensure the quarterly reports are reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – Iowa Vocational Rehabilitation Service staff have made the necessary internal control updates to assure that appropriate staff certify the accuracy of the report and is inclusive of signature for approval at the necessary approver level.
Conclusion – Response accepted.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Reporting for Federal Funding Accountability and Transparency Act
Criteria – The Uniform Guidance, Part 200.303, requires the Department establish and maintain effective internal control over the federal award which provides reasonable assurance the Department is managing the federal award in compliance with federal statutes, regulations and the terms of the federal award.
Under the requirements of the Federal Funding Accountability and Transparency Act
(Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward information should be reported no later than the last day of the month following the month in which the subaward was made.
Condition – The Department did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for subrecipients.
Cause – The Department did not have proper procedures in place to ensure the necessary reporting was completed.
Effect – The Department was not in compliance with reporting first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS), as required by 2 CFR Part 170.
Recommendation – The Department should establish policies and procedures to ensure first-tier subawards of $30,000 or more are reported to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Policies and procedures should ensure the reporting is reviewed and approved by an independent person who is knowledgeable about the program. This independent review should be documented by the reviewer’s signature or initials and date of review prior to submission.
Response and Corrective Action Planned – The Department now has a process in place for obtaining FFATA report information and submitting FFATA reports. Of the awards noted above, FFATA reporting was completed for one of the four awards.
The department will update existing policies and procedures to reflect the current process and will clearly assign FFATA reporting duties as well as provide FFATA training to department grant managers. In addition, the department is in the process of implementing monitoring activities to provide oversight of FFATA submission.
Conclusion – Response acknowledged. Documentation was not provided which showed completion of FFATA reporting.
Private Insurance Holders Questionnaires
Criteria – Per Chapter 1, page 34 of the Iowa Health and Human Services Medicaid Provider Manual, the Medicaid Program is the payer of last resort for covered medical services. Federal and state rules require that providers make a reasonable effort to pursue third-party resources. The provider is responsible for determining whether the member has Medicare or other insurance. Providers must bill Medicare and other third-party coverage before submitting claims to Iowa Medicaid.
Once a person has been approved for admission, the guardian or responsible party listed is provided Form 470-2826 Insurance Questionnaire which provides whether the person is covered by any third-party resources.
Condition – During the year ended June 30, 2024, Woodward Resource Center did not complete the Insurance Questionnaire and, therefore, was not able to determine if private insurance holders existed.
Cause – Although the Department has established policies regarding case file documentation, the policies were not followed.
Effect – Payments could be made to ineligible recipients or for improper amounts.
Recommendation – The Department should establish procedures to ensure client insurance questionnaires are properly completed.
Response and Corrective Action Planned – 470-2826 Insurance Questionnaire is not required by providers and is not used by providers to make a determination if other insurance exists. The form is not the means by which third party insurance is collected by providers or verified by the Medicaid program. This form is only used by members and is only one way in which Medicaid receives insurance information. Additionally, Woodward Resource Center does not have a policy or procedure that requires completion of the questionnaire and has no purpose for.
This form is used for Medicaid members to report insurance information to Iowa HHS.
Per Chapter 1, of the Iowa Health and Human Services Medicaid Provider Manual, Providers are required to first check for other insurance using the methods outlined in the manual. In addition, providers should question the member to determine if any other health care resources are available for payment
If a discrepancy exists between the member’s statement and the verification system, they should notify the Iowa Medicaid Revenue Collection Unit for fee-for-service members, the appropriate MCO or dental plan for IA Health Link members.
When members complete and submit the 470-2826 Insurance Questionnaire or a provider completes 470-5445 Insurance Update for FFS Members, the information provided is considered an insurance lead, and the insurance must be verified by Iowa HHS. This is one of multiple procedures in place to ensure TPL is identified for members.
In addition to verifying insurance leads submitted to Iowa HHS or the MCOs, by members or providers, Iowa HHS and the MCOs complete insurance verifications to identify third party payors through data matching daily. Verifications are completed daily through electronic data match agreements, websites, and calls to insurance carriers.
Conclusion – Response acknowledged. Documentation should be maintained in the case file to show determination of private insurance.