Audit 368768

Federal Agency: U.S. Department of Labor Federal Program Title: Reintegration of Ex-Offenders Assistance Listing No. 17.270 Award Periods: 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance – Suspension and Debarment • Other Matter Questioned Costs: None Condition: During our testing of 5 suspension and debarment samples, CLA noted no documentation was maintained related to verifying vendors were not suspended or debared for any of the 5 samples (100%). The statement of work outlines use of all of these vendors, but inclusion in the description in the statement of work of entities does not preclude the requirement to test for suspension and debarment issues. Though verification was done at the time of the audit, no support could be provided to show the control took place prior to use of the vendor. Criteria: Uniform Grant Guidance (200.214) states the non-Federal entity is subject to the debarment and suspension regulations as 2 CFR part 180, requiring no federal funds be awarded to parties that are suspended, debarred, or otherwise excluded from federal programs. Context: The Organization did not maintain adequate documentation related to verification that vendors were not suspension and debarment prior to use of such vendor. Cause: The Organization did not have effective internal controls over compliance in place to ensure documentation of suspension and debarment procedures were followed prior to use of the vendor. Effect: Failure to properly approve contractors and maintain documentation may result in in federal funds being charged to the grant for activities related to suspended or debarred vendors. Recommendation: The Organization should strengthen controls and adherence over their policy and the UG and DOL guidelines and ensure a control is in place for verifying vendors are not suspended, debarred, or otherwise excluded per UG guidelines prior to use of the vendor. The Organization should ensure these policies are followed for all applicable vendors and that documentation related to these controls are maintained and documented. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Labor Federal Program Title: Reintegration of Ex-Offenders Assistance Listing No. 17.270 Award Periods: 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance – Cash Management and Reporting Questioned Costs: None Condition: During our testing of 5 drawdown requests and 4 reports. CLA noted no instance of a review process performed by the Organization prior to the submission of those drawdown requests or reports. All drawdown requests and reports were submitted by the outsourced accountant, but proof of review by the organization was not documented. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure drawdowns and reports are formally reviewed by someone who did not prepare the drawdown or report to verify the correct amount is required. Context: The Organization did not maintain adequate documentation related to internal controls over cash management and reporting. Cause: The Organization did not have effective internal controls over compliance in place to ensure that cash management and reporting procedures were followed and documented. Effect: Failure to properly approve drawdowns, reports and maintain documentation may result in drawdown requests for unapproved or unrelated costs charged to the grant. Recommendation: The Organization should update and strengthen their policies to match UG and DOL guidelines, and create an internal control for drawdown request and report approval and review. The Organization should ensure these policies are followed for all drawdowns, reports and that documentation related to these policies are maintained. Views of Responsible Officials: There is no disagreement with the audit finding.