Audit 367061

Finding 2024-005 Agency: National Science Foundation Program: Research and Development Cluster (AL No. 47.076) Control Deficiency over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 25 selections, the transaction did not properly follow accrual basis accounting. The transaction was related to work performed in fiscal year 2023 but was included in the SEFA for fiscal year 2024. The total amount of this non-compliant transaction was $6,650. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, costs must be determined in accordance with generally accepted accounting principles (GAAP) to be allowable under Federal awards. Cause: AACC does not have an effective policy in place to ensure costs are properly recorded in the correct fiscal year. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend AACC implements a policy to properly accrue expenditures into the correct fiscal year. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.

Finding 2024-005 Agency: National Science Foundation Program: Research and Development Cluster (AL No. 47.076) Control Deficiency over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 25 selections, the transaction did not properly follow accrual basis accounting. The transaction was related to work performed in fiscal year 2023 but was included in the SEFA for fiscal year 2024. The total amount of this non-compliant transaction was $6,650. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, costs must be determined in accordance with generally accepted accounting principles (GAAP) to be allowable under Federal awards. Cause: AACC does not have an effective policy in place to ensure costs are properly recorded in the correct fiscal year. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend AACC implements a policy to properly accrue expenditures into the correct fiscal year. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.

Finding 2024-005 Agency: National Science Foundation Program: Research and Development Cluster (AL No. 47.076) Control Deficiency over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 25 selections, the transaction did not properly follow accrual basis accounting. The transaction was related to work performed in fiscal year 2023 but was included in the SEFA for fiscal year 2024. The total amount of this non-compliant transaction was $6,650. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, costs must be determined in accordance with generally accepted accounting principles (GAAP) to be allowable under Federal awards. Cause: AACC does not have an effective policy in place to ensure costs are properly recorded in the correct fiscal year. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend AACC implements a policy to properly accrue expenditures into the correct fiscal year. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.

Finding 2024-001 Agency: Department of Labor Program: Apprenticeship State Funds (AL No. 17.285) Material Weakness over Allowable Costs/Cost Principles Repeat Finding: No Condition: For 1 out of 24 selections, the amounts recorded in the SEFA did not match the supporting documentation. For 3 out of 24 selections, there was incomplete supporting documentation provided which was related to unsigned/unapproved subrecipient reimbursement request forms and missing invoices. For 2 out of 24 selections, the amounts recorded were noted to be duplicated and included in the SEFA twice. However, we noted that these costs were not yet billed to the Department of Labor. Criteria: As provided in 2 CFR section 200.403: Factors affecting allowability of costs, except where otherwise authorized by statute, must by adequately documented to be allowable under Federal awards. Cause: AACC received amounts from their subrecipient or vendor to accrue into their SEFA for fiscal year 2024, but did not receive all invoice or receipt documentation to ensure accuracy of the costs.. Effect: AACC was not in compliance with the Allowable Costs/Cost Principles requirements in accordance with Uniform Guidance. Questioned Costs: $85,758.22 Recommendation: We recommend AACC implements a policy to require all subrecipients and vendors to submit complete expenditure documentation within a reasonable timeframe and AACC to properly review the documentation for accuracy and completeness. We also recommend AACC implements a policy to properly track invoices during the accrual and payment process to ensure duplicate entries do not occur.Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.

Finding 2024-002 Agency: Department of Labor Program: Apprenticeship State Funds (AL No. 17.285) Material Weakness over Subrecipient Monitoring Repeat Finding: No Condition: For all subrecipients of AACC, there was no supporting documentation to show that a risk assessment was performed by the pass-through entity before awarding funds to each subrecipient. Additionally, for monitoring procedures performed AACC used general subrecipient monitoring forms which were all signed in March 2025 which is after the annual monitoring period ending December 31, 2024. The monitoring forms did not include information related to missing support for various subrecipient invoices as noted in finding 2024-001. Additionally, there were no follow-up procedures documented on the forms to ensure corrective action took place. Criteria: As provided in 2 CFR section 200.332: Requirements for pass-through entities, a pass-through entity must evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring procedures. Cause: AACC does not have a policy in place to properly document risk assessment of subrecipients before awarding funds to them. AACC does not have a policy in place to ensure all necessary monitoring procedures performed based on its risk assessment are properly documented in a timely manner. Effect: AACC was not in compliance with the Subrecipient Monitoring requirements in accordance with Uniform Guidance. Questioned Costs: Unknown Recommendation: We recommend AACC implements a policy to properly document their assessment of their subrecipients fraud risk and risk of noncompliance to then conclude on satisfactory monitoring procedures. We recommend AACC implements a policy to properly document all necessary monitoring procedures in a timely manner. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.

Finding 2024-003 Agency: Department of Labor Program: Apprenticeship State Funds (AL No. 17.285) Material Weakness over Procurement Repeat Finding: No Condition: For all procurements related to the Apprenticeship State Funds, there was no documentation provided to support the rationale for the procurement method, contract type selection, contractor selection, or the basis for the contract price prior to the signing of the contract. Criteria: As provided in 2 CFR section 200.318: General procurement standards, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Cause: AACC does not have a policy in place to properly document Apprenticeship State Funds procurement transactions. Effect: AACC was not in compliance with the Procurement requirements in accordance with Uniform Guidance. Questioned Costs: Unknown Recommendation: We recommend AACC implements a policy to properly document their procurements for the Apprenticeship State Funds. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.

Finding 2024-004 Agency: Department of Labor Program: Apprenticeship State Funds (AL No. 17.285) Control Deficiency over Reporting Repeat Finding: No Condition: The ETA-9130 report the third quarter of fiscal year 2024 did not properly include the federal share of unliquidated obligations of approximately $3 million to show unspent funds from subrecipients. Criteria: Financial reports submitted to the Department of Labor must be complete and accurate. Cause: AACC did not have an effective policy in place to ensure proper reporting of unliquidated obligations on the ETA-9130 report. Effect: AACC was not in compliance with the Reporting requirements in accordance with Uniform Guidance. Questioned Costs: None Recommendation: We recommend AACC implements a policy to properly report all federal obligations on the ETA-9130 report. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.